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The Causal Relationship Between Economic Growth and Export: The Case of Russia

Author

Listed:
  • Özgür UYSAL

    (Alanya Alaaddin Keykubat University, Faculty of Management, Department of Economics and Finance, Antalya, Turkey)

  • Sultan SAT

    (Alanya Alaaddin Keykubat University, Institute of Social Sciences, Department of International Trade, Antalya,Turkey)

Abstract

The relationship between economic growth and export has been one of the most disputed issues in economics literature. The main objective of this paper is to find the direction of the causality relationship between economic growth and export in Russia. We performed our analysis using quarterly economic growth and export data from 2003:q1 to 2018:q4. Using the ADF unit root test for stationarity we first analyzed whether the variables contained a unit root. As a result, we determined that all the variables were stationary at their first differences. Subsequently, we conducted the Engle Granger Cointegration test to analyze the long term relationship between the variables and we determined that there was a long-term relationship between the variables. By using the Granger Causality Test to determine the direction of the relationship, we found that a unidirectional causality existed between economic growth and export in the Russian economy between 2003 and 2018. As seen in the causality relationship between economic growth and export being unidirectional (from export to growth), the effect of export on economic growth is dominant because of export’s dependence on raw materials. Russia should reduce its economic dependence on oil prices and strong structural improvements are necessary to reduce this dependence.

Suggested Citation

  • Özgür UYSAL & Sultan SAT, 2019. "The Causal Relationship Between Economic Growth and Export: The Case of Russia," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 69(1), pages 43-65, June.
    • Handle: RePEc:ist:journl:v:69:y:2019:i:1:p:43-65
    DOI: 10.26650/ISTJECON2019-0011
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    References listed on IDEAS

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    3. Konya, Laszlo, 2006. "Exports and growth: Granger causality analysis on OECD countries with a panel data approach," Economic Modelling, Elsevier, vol. 23(6), pages 978-992, December.
    4. Elena Kuzmenko & Luboš Smutka & Mikhail Pankov & Nadezhda Efimova, 2017. "The Success of Economic Policies in Russia: Dependence on Crude Oil vs. Export Diversification," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(1), pages 299-310.
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    More about this item

    Keywords

    Export; economic growth; Russian economy;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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