THE EXPORT-LED GROWTH HYPOTHESIS FOR AZERBAIJAN

Abstract

The aim of this paper is to test the export-led growth hypothesis for the Republic of Azerbaijan. Azerbaijan is an oil-exporting country and the share of oil and oil products in total exports is 94.78 percent in 2009. In this paper, the export-led growth hypothesis is tested for Azerbaijan using cointegration and error correction model techniques for the 1996-2008 period. Long-run and short-run relationship was found between real GDP, and exports and imports. The results fail to find any support for the proposition that exports Granger cause GDP. However, real GDP Granger causes exports. The findings of this study showed that export-led growth hypothesis is not valid for Azerbaijan.

Keywords

• Export Led Growth, Azerbaijan

Kaynakça

1. Abhayartne, A.S.P. (1996). Foreign Trade and Economic Growth Evidence from Sri Lanka, 1960-1992, Applied Economics Letters, 3: 567-570.
2. Abou-Stait, F. (2005). Are Exports the Engine of Economic Growth? An Application of Cointegration and Causality Analysis for Egypt, 1977- 2003, African Development Bank, Economic Research Working Paper Series, No 76.
3. Awokuse, T.O. (2008). Trade Openness and Economic Growth: Is Growth Export-Led or Import-Led?, Applied Economics, 40 (2): 161–173.
4. Bahmani-Oskooee, M. and Alse, J. (1993). Export Growth and Economic Growth: An Application of Cointegration and Error-Correction Modelling, The Journal of Developing Areas, 27(4): 535-542.
5. Bahmani-Oskooee, M., Mohtadi, H. and Shabsigh, G. (1991). Export, Growth and Causality in LDCs, Journal of Development Economics, 36(2): 405- 415.
6. Balassa, B. (1978). Exports and Economic Growth, Journal of Development Economics, 5: 181-189.
7. Bilgin, C. and Şahbaz, A. (2009). Türkiye’de Büyüme ve İhracat Arasındaki Nedensellik İlişkileri, Gaziantep Üniversitesi Sosyal Bilimler Dergisi, 8(1): 177-198.
8. Dickey, D.A and Fuller, W.A. (1979). Distribution of the Estimators of Autoregressive Time Series with a Unit Root, Journal of the American Statistical Association, 74: 427-431.

9. Durbin, J. and Watson, G. S. (1951). Testing for Serial Correlation in Least Squares Regression, II, Biometrika, 38(2): 159–179.
10. Engle, R.F. and Granger, C. W. J. (1987). Cointegration and Error Correction: Representation, Estimation and Testing, Econometrica, 55: 251-276.
11. Fosu, A.K. (1996). Primary Exports and Economic Growth in Developing Countries, World Economy, 19: 465-475.
12. Ghatak, S., Milner, C. and Utkulu, U. (1997). Exports, Export Composition and Growth: Cointegration and Causality Evidence for Malaysia, Applied Economics, 29(2): 213-223.
13. Giles, D.E.A., Giles, J.A. and McCann, E. (1993). Causality, Unit Roots and Export-Led Growth: The New Zealand Experience, Journal of International Trade and Economic Development, 1(1): 195-218.
14. Granger, C.W.J. (1969). Investigating Causal Relations by Econometric Models: Cross Spectral Methods, Econometrica, 37(3): 424-438.
15. Granger, C.W.J. (1986). Developments in the Study of Cointegrated Economic Variables, Oxford Bulletin of Economics and Statistics, 48(3): 213-228.
16. Greenaway, D. and Sapsford, D. (1994). What does Liberalization do for Exports and Growth, Weltwirtschaffliches Archiv, 130(1): 152-174.
17. Gujarati, D.N. (2003). Basic Econometrics, West Point: US Military Academy.
18. Hendry, D.F. (1995). Dynamic Econometrics, Oxford University Press: Oxford.
19. Jung, W.S. and Marshall, J. (1985). Exports, Growth and Causality in Developing Countries, Journal of Development Economics, 18:1-12.
20. Kagnew, W. (2007). Export Performance and Economic Growth in Ethiopia, Awarded Theses 2007, World Bank Institute, 117-145.
21. Kasman, A. and Emirhan, P.N. (2007). Export-Led or Import-Led Economic Growth? Evidence from Cointegration Tests with and without Regime Shifts, Yapı Kredi Economic Review, 18(1): 3-19.
22. Kravis, I.B. (1970). Trade as a Handmaiden of Growth: Similarities Between the Nineteenth and Twentieth Centuries, The Economic Journal, 80(320): 850-872.
23. Kwiatkowski, D., Phillips, P. C. B., Schmidt, P., and Shin, Y. (1992). Testing the Null Hypothesis of Stationarity against the Alternative of a Unit Root, Journal of Econometrics, 54: 159–178.
24. Mackinnon, J.G. (1991). Critical Values of Cointegration Tests, Long Run Economic Relationship: Readings in Cointegration, New York: Oxford University Press.
25. Phillips, P.C.B. and Perron, P. (1988). Testing for Unit Roots in Time Series Regression, Biometrika, 75: 335-346.
26. Ram, R. (1987). Exports and Economic Growth in Developing Countries: Evidence from Time-Series and Cross-Section Data, Economic Development and Cultural Change, 36: 51-72.
27. Sargan, J.D. (1984). Wages and Prices in the United Kingdom: A Study in Econometric Methodology, in Hendry, D.F. and K.F. Wallis (Eds.), Econometric and Quantitative Economics, Oxford: Basil Blackwell.
28. Sargent, T.J. (1976). A Classical Macroeconomic Model for the United States, Journal of Political Economy, 84: 207-238.
29. Sharma, A. and Panagiotidis, T. (2003). An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001), Sheffield Economic Research Paper Series: Sheffield.
30. Taban, S. and Aktar, İ. (2005). An Empirical Examination of the Export Led- Growth Hypothesis in Turkey, First International Conference on Business, Management and Economics, Yasar University, Izmir.
31. The State Statistical Committee of the Republic of Azerbaijan, Foreign Trade Yearbook 2000-2009, Səda Nəşriyyatı: Bakı.
32. The State Statistical Committee of the Republic of Azerbaijan, Yearbook 1999, 2004, 2009, Səda Nəşriyyatı: Bakı.
33. Vohra, R. (2001). Export and Economic Growth: Further Time Series Evidence from Less-Developed Countries, International Advances in Economic Research, 7(3): 345-350.
34. Williamson, R.B. (1978). The Role of Exports and Foreign Capital in Latin American Economic Growth, Southern Economic Journal, 45: 410-420.
35. Yiğidim, A. and Köse, N. (1997). İhracat ve Ekonomik Büyüme Arasındaki İlişki, İthalatın Rolü: Türkiye Örneği (1980-1996), Ekonomik Yaklaşım, 8(26): 71-85.