Exports and economic growth in developing countries

This dissertation extends our understanding of the relationship between exports and growth. The study emphasizes time-series evidence rather than the aggregate cross-section evidence. The use of time-series analysis may reveal information about the dynamic behavior within countries. In the time-series analysis, data are checked for nonstationary and cointegration relationships among variables. Thirty developing countries are examined and a mixture of model forms signaled by the unit root tests are applied to deal with the temporal behavior of each country. The empirical results in this study show that as a group, the relationship between exports and growth of GDP of countries in the Asian region seems stronger than within countries of the Western Hemisphere region. Results pertaining to the African and the Middle-East groups are weak in general. The relationship between the growth of GDP and exports appears strongest where there is an outward trade orientation. Other factors that appear to be associated with the performance of exports include the diversity of exports and the level of processing for the export products. This study also shows that the classification of export products also plays an important role in determining the performance of the export sector. Countries with a diversified manufacturing export base register stronger contribution to the growth of GDP than countries that depend on primary exports. In the study of externality effect of the export sector on the nonexport sector, it is found that the composition of export products is probably one of the major factors that determine the extent of the externality. Positive externalities from the export sector are found in countries that export products with linkages to other ancillary industries. The linkage of export products to other industries is clearly related to the level of processing of exports