Export Performance and Economic Growth in East Asian Economies – Application of Cointegration and Vector Error Correction Model
East Asian Economies are considered to be most successful economies in the world. Following the footsteps of other East Asian economies such as Japan and South Korea, China also shifted towards export-led growth strategy in 80s. This study analyzes the effect of export performance on economic gro...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Ala-Too International University
2016-11-01
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| Series: | Eurasian Journal of Business and Economics |
| Subjects: | |
| Online Access: | http://www.ejbe.org/EJBE2016Vol09No18p135MALHOTRA-KUMARI.pdf |
| Summary: | East Asian Economies are considered to be most successful economies in the world.
Following the footsteps of other East Asian economies such as Japan and South Korea,
China also shifted towards export-led growth strategy in 80s. This study analyzes the
effect of export performance on economic growth of three major East Asian economies
i.e. Japan, South Korea, and China. This study has conducted the econometric analysis of
macro data under multivariate framework for the period 1980-2012. In order to
examine the causal relationship between exports and economic growth, the study has
applied time series techniques such as Augmented Dickey-Fuller (ADF) and PhillipsPerron
(PP) unit root tests to check stationarity of variables, Johansen cointegration test
for long run relationship, vector error correction model (VECM) for short run dynamics
and for estimating speed of adjustment towards long run equilibrium. The analysis also
made use of techniques Impulse Response Function (IRF) and Variance Decomposition
Analysis (VDA) to investigate the interrelationships within the system. The estimated
results suggested that all variables were cointegrated for East Asian economies. The
study concluded that export-led growth (ELG) was only long run phenomenon in China
and South Korea. The results for Japan supported growth led exports (GLE) particularly
for short run. |
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| ISSN: | 1694-5948 1694-5972 |