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The Validity of Export-Led Growth Hypothesis for Jordan: A Bounds Testing Approach

Ghazi Al-Assaf () and Bashier Al-Abdulrazag
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Bashier Al-Abdulrazag: Business Economics Department, Mu'tah University, Al-Karak, Jordan

International Journal of Economics and Financial Issues, 2015, vol. 5, issue 1, 199-211

Abstract: The Export-led growth hypotheses postulates that there is a positive causal relationship running from exports to economic growth. Accordingly, the aim of this study is to empirically investigate the applicability of the Export-Led Growth hypothesis for Jordan over the period 1980- 2012. The Autoregressive Distributed Lag model (ARDL) to cointegration approach was used to ensure the existence of the long-run linear combination among variables over the study period as well as the short run movement. The tests of the variables properties show that the included variables are integrated of order one, I(1), and cointegrated indicating the existence of a long-run equilibrium. The empirical results show that they are in line with previous research specifically on Jordan case. Namely, that the exports are a significant stimulus of the economic growth in Jordan, where exports affect output growth positively in both the short-run and in the long-run. These results suggest that authorities implement an export expansion strategy to stimulating exports and hence economic growth.

Keywords: Exports; Economic Growth; ARDL; Jordan. (search for similar items in EconPapers)
JEL-codes: C22 F14 F43 (search for similar items in EconPapers)
Date: 2015
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