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

Athanasia Kalaitzi and Trevor W. Chamberlain

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: diversification; Re-exports; Economic growth; Causality; UAE (search for similar items in EconPapers)
JEL-codes: J01 L81 R14 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2019-11-16
New Economics Papers: this item is included in nep-ara and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Review of Middle East Economics and Finance, 16, November, 2019. ISSN: 1475-3685

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103827

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