Causality tests of export-led growth: The case of Mexico

Although econometric studies have confirmed the relationship between exports and economic growth, some studies are inherently weak in that they are based on an a priori assumption that export growth causes economic growth. This is erroneous because causality should be tested and proven rather than s...

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Bibliographic Details
Published in:Atlantic economic journal 1995-06, Vol.23 (2), p.140-145
Main Authors: McCarville, Mary, Nnadozie, Emmanuel
Format: Article
Language:English
Subjects:
Causality
Economic aspects
Economic development
Economic growth
Economic theory
Exports
Foreign trade promotion
Statistical analysis
Studies
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Summary:Although econometric studies have confirmed the relationship between exports and economic growth, some studies are inherently weak in that they are based on an a priori assumption that export growth causes economic growth. This is erroneous because causality should be tested and proven rather than simply assumed. This paper uses the Granger causality test which takes into consideration the time series properties of the data to examine the incidence of export-led development in Mexico. The authors conclude that Granger causality test confirms the relationship between export growth and GDP growth in the Mexican case as posited by development theory. (JEL 010)
ISSN:0197-4254
1573-9678
DOI:10.1007/BF02300439