Economic growth and the external sector: Evidence from Korea, lessons for Mexico

Julen Berasaluce and José Romero
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Julen Berasaluce: El Colegio de México
José Romero: El Colegio de México

Estudios Económicos, 2017, vol. 32, issue 1, 95-131

Abstract: In this paper, we have set up an empirical analysis of the Korean external sector between 1980 and 2015, in order to identify the potential relationships between economic growth, exports, imports and foreign direct investment. We chose to study Korea because is a country that has been taken as a reference of the export-led growth hypothesis in order to justify export-promoting policies in Mexico. The results of our four-variable vector autoregressive model suggest that exports and foreign direct investment are not driving economic growth in Korea. Therefore, one should be cautious about policies that promote such investment and export tools to boost economic growth.

Keywords: South Korea; VAR; industrial policy; exports; imports; FDI; growth (search for similar items in EconPapers)
JEL-codes: C31 F14 F43 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:emx:esteco:v:32:y:2017:i:1:p:95-131

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