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On the International Trade and Economic Growth Nexus in New Zealand

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  • Tarlok Singh

Abstract

type="main" xml:id="ecpa12099-abs-0001"> This study examines the effects of international trade and investment on output and tests the Granger-causal nexus among trade, investment and economic growth in New Zealand for the period 1954–2007. The results provide consistent support for the long-run effects of trade and investment on output. The optimal single-equation and the vector autoregression-based system estimates of the model consistently suggest positive and significant long-run effects of exports and investment on output. The effects of imports on output are positive across all and statistically significant across most estimators. The Johansen test for cointegration suggests the presence of one equilibrium relationship among the model variables. The JMN test for cointegration with structural breaks provides mixed support, while the end-of-sample cointegration breakdown tests lend dominant support for cointegration among the model variables. The positive and significant long-run effects of exports and investment on output underline the need for the promotion of exports and increase in investment to foster higher levels of output and economic growth.

Suggested Citation

  • Tarlok Singh, 2015. "On the International Trade and Economic Growth Nexus in New Zealand," Economic Papers, The Economic Society of Australia, vol. 34(1-2), pages 92-106, June.
    • Handle: RePEc:bla:econpa:v:34:y:2015:i:1-2:p:92-106
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    File URL: http://hdl.handle.net/10.1111/ecpa.2015.34.issue-1pt2
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    Cited by:

    1. Zhang, Jinping & Xiao, Honglin & Li, Jiayi & Shi, Xixi, 2021. "Study on the cointegration relationship between water supply and demand in the irrigation district with structural breaks," Agricultural Water Management, Elsevier, vol. 258(C).
    2. Yangyuyu Luo & Sayeeda Bano, 2020. "Modelling New Zealand dairy products: evidence on export survival and duration," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 605-631, July.
    3. Bolor Khurelchuluun & Liang Cao & Wenshou Yan, 2023. "The Impact of Trade Openness on Economic Growth in Landlocked Developing Countries," International Journal of Science and Business, IJSAB International, vol. 28(1), pages 84-97.
    4. Sayeeda Bano & Nawal K. Paswan, 2016. "New Zealand–India Trade Relations and Growth Potential: An Empirical Analysis," India Quarterly: A Journal of International Affairs, , vol. 72(1), pages 50-74, March.
    5. Rahman, Mohammad Mafizur & Mamun, Shamsul Arifeen Khan, 2016. "Energy use, international trade and economic growth nexus in Australia: New evidence from an extended growth model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 806-816.
    6. Rahman, Mohammad Mafizur, 2021. "The dynamic nexus of energy consumption, international trade and economic growth in BRICS and ASEAN countries: A panel causality test," Energy, Elsevier, vol. 229(C).
    7. Natalia I. Doré & Aurora A. C. Teixeira, 2023. "Empirical Literature on Economic Growth, 1991–2020: Uncovering Extant Gaps and Avenues for Future Research," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 15(1), pages 7-37, January.

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