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Further evidence on export-led growth in the United Arab Emirates: are non-oil exports or re-exports the key to economic growth?

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  • Kalaitzi, Athanasia
  • Chamberlain, Trevor W.

Abstract

This study investigates the relationships between exports and economic growth in the United Arab Emirates. Understanding these relationships is important for purposes of establishing appropriate growth and develop- ment policies and strategies. The study uses an augmented Cobb–Douglas production function to examine the causality between non-oil exports, re-exports and economic growth over the period 1981–2012. To investigate the existence of a long-run relationship between the variables, the study performs the Johansen cointegration test, while the direction of the short-run causality is examined by applying the Granger causality test in a vector error correction model framework. A modified Wald test in an augmented vector autoregressive model is ap- plied in order to find the direction of the long-run causality. This research provides evidence in support of an indirect short-run uni-directional causality from economic growth to re-exports, through physical capital accu- mulation and imports. As for long-run causality, the results show that a bi-directional causality exists between re-exports and economic growth in the UAE.

Suggested Citation

  • Kalaitzi, Athanasia & Chamberlain, Trevor W., 2019. "Further evidence on export-led growth in the United Arab Emirates: are non-oil exports or re-exports the key to economic growth?," LSE Research Online Documents on Economics 103827, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:103827
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    More about this item

    Keywords

    diversification; Re-exports; Economic growth; Causality; UAE;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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