The Journal of Economic Studies and Policies

The Journal of Economic Studies and Policies

Analysis of the Export-Led Growth Theory in Iran

Document Type : Original Article

Authors
Arash Hadizade 1
Jafar Abbasi 2
Shahriar Zaroki 3
1 Faculty member of Islamic Azad University, Qazvin Branch
2 Master of Economics
3 Faculty member of the Department of Economic Sciences, Islamic Azad University, Ghaemshahr Branch, Iran
10.22096/esp.2011.26189
Abstract
This article seeks to examine the export-led growth theory using Feder (1982) neoclassical growth model for Iran. For this purpose, time-series data released by the Central Bank of Iran for the years (1959-2007) has been used.
After the unit root test, in order to investigate co integration between the two economic variables-export and GDP two Engel-Granger and Johansen's methods were used. Then, the causal effects of export growth on the growth of GDP and growth of investment were tested. Finally, the reactions of the variables to the shocks were investigated by estimation of vector autoregressive model (VAR), using the impulse response function (IRF) and variance decomposition methods.
The findings of Engel-Granger's method didn’t confirm the co integration between the variables of the model. However, a co integration vector was found by Johnson's method. Furthermore, the causal relationship from export to GDP was confirmed but it was rejected from export to investment. Impulse response function showed that the response of GDP and export in response of one standard deviation shock has a similar trend. In the way that it regressed to its long run trend after 17 periods. Investment regressed to its permanent period after 8 periods. The findings of variance decomposition showed that 100 percent of the variation of GDP is derived from the variable in the first period and in the second period 91 percent of the variation of the GDP was explained by the variable and 1/3 percent of the variation was explained by investment.

Highlights

الف)فارسی:

  1. آمارنامه اقتصادی بانک مرکزی طی سال‌های مختلف
  2. تشکینی، احمد؛ اقتصاد سنجی کاربردی به کمک میکروفیت، تهران، انتشارات رسا، چاپ اول، 1384.
  3. عسگری، منوچهر؛ محمدی، تیمور؛ «هم‌انباشتگی مفاهیم اهمیت و نقاط و ضعف»، فصلنامه پژوهش‌های اقتصادی ایران، دانشکده اقتصاد دانشگاه علامه طباطبائی، 1377، شماره 3.
  4. گجراتی، دامودار؛ مبانی اقتصاد سنجی، ترجمه حمید ابریشمی، جلد 2، انتشارات دانشگاه تهران، چاپ دوم، 1378.
  5. موسی‌پور، فرشته؛ بررسی تورم در ایران با استفاده از تکنیک همگرایی، پایان‌نامه دوره کارشناسی ارشد، دانشکده علوم اقتصادی و سیاسی دانشگاه شهید بهشتی، 1377.
  6. نوفرستی، محمد؛ ریشه واحد و هم‌جمعی در اقتصاد‌سنجی، تهران، انتشارات رسا، چاپ اول، 1378.

ب- لاتین

  1. Asafu-Adjaye, J & D Chakraborty, "Export-led Growth and Import Compression: Further Time Series Evidence from LDCs", Australian Economic Papers, vol 38, 1999, 164-175.
  2. Bahmani-Oskoee, M & J Alse, "Export Growth and Economic Growth: An Application of Cointegration and Error-Correction Modeling", Journal of Development Areas, No. 27, July 1995, No. 27, 535-542.
  3. Begum & Shamsuddin, "Export-led Growth Evidence From Bangladesh", Australian Economic Papers, 2005, No.44, 223-255.
  4. Darrat, Ali F, "Are exports and engine of growth? Another look at the evidence", Applied Economics, 1987, No.19, 277-283.
  5. Dhawan, U & B Biswal, "Re-examining export led growth hypothesis: a multivariate cointegration analysis for India", Applied Economics, 1994, No. 31, 30-525.
  6. Feder, Gershon, "On exports and economic growth", Journal of Development Economics, 1982, No.12, 59-73.
  7. Harris, R.I.D, Using Cointegration Analysis in Econometric Modeling, Hall Harvester Wheasheaf Press, 1995.
  8. Henriques, I & Peter Sadorsky, "Export-led growth or growth-driven exports? The Canadian case", Canadian Journal of Economics, Vol.29, 1996, No.3, 540-555.
  9. Hsiao, M C W, "Tests of Causality and Exogeneity between Exports and Economic Growth: The Case of Asian NICs", Journal of Economic Development, Vol.12, 1987, No.2, 59-143.
  10. Johansen, S, "Statistical Analysis of Cointegration Vectors", Journal of Economic Dynamics and Control, 1988, No.12, 231-254.
  11. Johansen, S & K. Juselius., "Maximum Likelihood Estimation and Inference on Cointegration-With Applications for the Demand for Money", Oxford Bulletin of Economics & Statistics, Vol.2, 1990, No.52, 169-210.
  12. Jung, W. S. & P. J. Marshall, "Exports, Growth and Causality in Developing Countries", Journal of Development Economics, 1985, No.18, 1-12.
  13. Love, J, "Export Instability and the Domestic Economy: Questions of Causality", Journal of Development Studies, Vol.4, 1992, No.28, 42-735.
  14. Lutkepohl, Helmut & Hans-Fuggert Reimers, "Granger-Causality in Cointegration VAR Process, The case of term structure", Economic letter elsivier, Vol.40(3), 1992, 263-268.
  15. Nidugala, G K, "Exports and Economic Growth in India: An Empirical Investigation", Indian Economic Journal, Vol.3, 2007, No.57, 67-78.
  16. Sims, C.A, "Macroeconomics and Reality",Econometrics, 1980, No.48, 1-48.
  17. Shan Wang & Ming Sun, "Export-led growth hypothesis: Evidences from China", Chinese Applied Economics, Vol. 56, 2006, 43-68.

Keywords
Export-Led Growth
Co Integration
economic growth
Granger Causality Test
VAR
Impulse Response Function

  1. الف)فارسی:

    1. آمارنامه اقتصادی بانک مرکزی طی سال‌های مختلف
    2. تشکینی، احمد؛ اقتصاد سنجی کاربردی به کمک میکروفیت، تهران، انتشارات رسا، چاپ اول، 1384.
    3. عسگری، منوچهر؛ محمدی، تیمور؛ «هم‌انباشتگی مفاهیم اهمیت و نقاط و ضعف»، فصلنامه پژوهش‌های اقتصادی ایران، دانشکده اقتصاد دانشگاه علامه طباطبائی، 1377، شماره 3.
    4. گجراتی، دامودار؛ مبانی اقتصاد سنجی، ترجمه حمید ابریشمی، جلد 2، انتشارات دانشگاه تهران، چاپ دوم، 1378.
    5. موسی‌پور، فرشته؛ بررسی تورم در ایران با استفاده از تکنیک همگرایی، پایان‌نامه دوره کارشناسی ارشد، دانشکده علوم اقتصادی و سیاسی دانشگاه شهید بهشتی، 1377.
    6. نوفرستی، محمد؛ ریشه واحد و هم‌جمعی در اقتصاد‌سنجی، تهران، انتشارات رسا، چاپ اول، 1378.

    ب- لاتین

    1. Asafu-Adjaye, J & D Chakraborty, "Export-led Growth and Import Compression: Further Time Series Evidence from LDCs", Australian Economic Papers, vol 38, 1999, 164-175.

    2. Bahmani-Oskoee, M & J Alse, "Export Growth and Economic Growth: An Application of Cointegration and Error-Correction Modeling", Journal of Development Areas, No. 27, July 1995, No. 27, 535-542.

    3. Begum & Shamsuddin, "Export-led Growth Evidence From Bangladesh", Australian Economic Papers, 2005, No.44, 223-255.

    4. Darrat, Ali F, "Are exports and engine of growth? Another look at the evidence", Applied Economics, 1987, No.19, 277-283.

    5. Dhawan, U & B Biswal, "Re-examining export led growth hypothesis: a multivariate cointegration analysis for India", Applied Economics, 1994, No. 31, 30-525.

    6. Feder, Gershon, "On exports and economic growth", Journal of Development Economics, 1982, No.12, 59-73.

    7. Harris, R.I.D, Using Cointegration Analysis in Econometric Modeling, Hall Harvester Wheasheaf Press, 1995.

    8. Henriques, I & Peter Sadorsky, "Export-led growth or growth-driven exports? The Canadian case", Canadian Journal of Economics, Vol.29, 1996, No.3, 540-555.

    9. Hsiao, M C W, "Tests of Causality and Exogeneity between Exports and Economic Growth: The Case of Asian NICs", Journal of Economic Development, Vol.12, 1987, No.2, 59-143.

    10. Johansen, S, "Statistical Analysis of Cointegration Vectors", Journal of Economic Dynamics and Control, 1988, No.12, 231-254.

    11. Johansen, S & K. Juselius., "Maximum Likelihood Estimation and Inference on Cointegration-With Applications for the Demand for Money", Oxford Bulletin of Economics & Statistics, Vol.2, 1990, No.52, 169-210.

    12. Jung, W. S. & P. J. Marshall, "Exports, Growth and Causality in Developing Countries", Journal of Development Economics, 1985, No.18, 1-12.

    13. Love, J, "Export Instability and the Domestic Economy: Questions of Causality", Journal of Development Studies, Vol.4, 1992, No.28, 42-735.

    14. Lutkepohl, Helmut & Hans-Fuggert Reimers, "Granger-Causality in Cointegration VAR Process, The case of term structure", Economic letter elsivier, Vol.40(3), 1992, 263-268.

    15. Nidugala, G K, "Exports and Economic Growth in India: An Empirical Investigation", Indian Economic Journal, Vol.3, 2007, No.57, 67-78.

    16. Sims, C.A, "Macroeconomics and Reality",Econometrics, 1980, No.48, 1-48.

    17. Shan Wang & Ming Sun, "Export-led growth hypothesis: Evidences from China", Chinese Applied Economics, Vol. 56, 2006, 43-68.

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