Export Composition and Long-run Economic Growth Impact: A Cointegration Analysis for ASEAN ‘Latecomer’ Economies

Klimis Vogiatzoglou

Margin: The Journal of Applied Economic Research, 2019, vol. 13, issue 2, 168-191

Abstract: Export expansion can be a significant engine of economic growth for developing economies. The size of the growth effect of exports depends not only on volume but also on the sectoral composition of exports. By explicitly considering the sectoral export composition, this article examines over a 31-year period the long-run growth impact of exports in four transition and emerging economies of the Association of Southeast Asian Nations (ASEAN), namely Cambodia, Laos, Myanmar and Vietnam. More specifically, for each country, a long-run equilibrium analysis within a cointegration framework is conducted for three broad sectors (agriculture, mining/natural resources and manufacturing) as well as for 22 manufacturing industries during 1987–2017. The results indicate that there has been sizeable export expansion (especially in Vietnam), but export composition differs substantially across economies, which has an effect on the overall growth impact of the country’s exports. Clear evidence of export-led growth is found only for some sectors. Countries that rely heavily on primary goods have experienced relatively lower export-led growth. Export restructuring in manufacturing industries is associated with a larger long-run growth effect for a country’s exports. Our findings suggest that policies encouraging diversification away from traditional export sectors would be expected to lead to higher long-run growth effects of exports. Furthermore, our analysis implies a steady strengthening of export dynamism in ASEAN ‘latecomer’ economies and their rising significance in the global trade system. JEL Classification: F14, F43, F63, O11, O47

Keywords: Exports; Export composition; Economic growth; Cambodia; Lao PDR; Myanmar; Vietnam; Cointegration analysis (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:13:y:2019:i:2:p:168-191

DOI: 10.1177/0973801018812571

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