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Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?

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  • ONOSE, Okpeku Lilian
  • Aras, Osman Nuri

Abstract

The export-led growth hypothesis states a positive relationship between the growth of exports and long-run economic growth. This study examines the validity of the export-led growth hypothesis of services exports in 5 emerging economies, including Brazil, India, Nigeria, China, and South Africa (BINCS), for the period of 1980-2019. The study employs the panel mean group autoregressive distributed lag (ARDL) procedure to identify a causal relationship between services exports and gross domestic product (GDP) per capita. The findings show that the export-led growth hypothesis in services only has a positive effect on economic growth in the short run while other variables, including foreign direct investment (FDI), gross capital formation, and labour, increase economic growth in the long run. Hence, the emerging countries should focus more on internal investment to boost growth in the long and short run.

Suggested Citation

  • ONOSE, Okpeku Lilian & Aras, Osman Nuri, 2021. "Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?," MPRA Paper 108350, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108350
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    File URL: https://mpra.ub.uni-muenchen.de/108350/1/MPRA_paper_108350.pdf
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    References listed on IDEAS

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    Cited by:

    1. Naima Mubeen & Dr. Muhammad Abdul Quddus, 2023. "Trade Horizons: A Comprehensive Study of Determinants Shaping Export Diversification in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(3), pages 446-458.

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    More about this item

    Keywords

    Exports; Economic Growth; Export-Led Growth; Services Exports; Emerging Economies;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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