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An Investigation Of Cointegration And Causality Between Investments, Exports, Openness, Industrial Production And Economic Growth: A Comparative Study For The East European Countries

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  • Ramona Simut

    (Department of Economics, Faculty of Economics, University of Oradea, Oradea, Romania,)

  • Ioana Mester

    (Department of Economics, Faculty of Economics, University of Oradea, Oradea, Romania,)

Abstract

The study of the economic growth has old implications. An analysis of relevant literature shows that there is a series of empirical studies that have analysed, tested and explained the correlation between the dynamics of exports, investments, the openness of economies and the process of economic growth. This paper examines the role of investments, export and openness in relation to economic growth for 10 East European countries using quarterly data between 2000 and 2013. Unit root tests were used in order to analyse the stationarity of variables. We have then employed the Johansen Cointegration test in order to identify the existence of a long-run relationship between the variables as well as the Granger causality test in order to test the hypotheses about the presence of causality between selected variables. At the same time VAR and VECM models were estimated for each of the 10 East European Countries; a comparative analysis of the results shows the presence, direction and intensity of the correlation and causality between investments, exports, openness and economic growth.

Suggested Citation

  • Ramona Simut & Ioana Mester, 2014. "An Investigation Of Cointegration And Causality Between Investments, Exports, Openness, Industrial Production And Economic Growth: A Comparative Study For The East European Countries," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 369-378, July.
    • Handle: RePEc:ora:journl:v:1:y:2014:i:1:p:369-378
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    File URL: http://anale.steconomiceuoradea.ro/volume/2014/n1/039.pdf
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    References listed on IDEAS

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    1. Eller, Markus & Haiss, Peter & Steiner, Katharina, 2006. "Foreign direct investment in the financial sector and economic growth in Central and Eastern Europe: The crucial role of the efficiency channel," Emerging Markets Review, Elsevier, vol. 7(4), pages 300-319, December.
    2. repec:ebl:ecbull:v:6:y:2007:i:13:p:1-9 is not listed on IDEAS
    3. Nikolaos Dritsakis, 2004. "Exports, investments and economic development of pre-accession countries of the European Union: an empirical investigation of Bulgaria and Romania," Applied Economics, Taylor & Francis Journals, vol. 36(16), pages 1831-1838.
    4. Kamal Upadhyaya & Gyan Pradhan & Dharmendra Dhakal & Rabindra Bhandari, 2007. "Foreign Aid, FDI and Economic Growth in East European Countries," Economics Bulletin, AccessEcon, vol. 6(13), pages 1-9.
    5. Konya, L., 2004. "Export-Led Growth, Growth-Driven Export, Both or None? Granger Causality Analysis on OECD Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 4(1).
    6. Alfredo M. Pereira & Zhenhui Xu, 2000. "Export Growth and Domestic Performance," Review of International Economics, Wiley Blackwell, vol. 8(1), pages 60-73, February.
    7. Tekin, Rıfat Barış, 2012. "Economic growth, exports and foreign direct investment in Least Developed Countries: A panel Granger causality analysis," Economic Modelling, Elsevier, vol. 29(3), pages 868-878.
    8. Li, Xiaoying & Liu, Xiaming, 2005. "Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship," World Development, Elsevier, vol. 33(3), pages 393-407, March.
    9. Capolupo, Rosa & Celi, Giuseppe, 2005. "Openness and Growth in Central Eastern European Countries," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 58(2), pages 141-165.
    10. Pop Silaghi, Monica Ioana, 2009. "Exports-Economic Growth Causality: Evidence from CEE Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(2), pages 105-117, June.
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    Cited by:

    1. B. Venkatraja, 2018. "Dynamics of Aggregate Demand Factors in Macro Growth: An European Perspective," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 3-21.

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    More about this item

    Keywords

    Granger causality; Economic Growth; Cointegration; VECM and VAR models.;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C59 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Other

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