Influence of systemic banking crisis and currency crisis on the relationship of export and economic growth

Syed Raza and Mohd Karim

Journal of Chinese Economic and Foreign Trade Studies, 2017, vol. 10, issue 1, 82-110

Abstract: Purpose - This study aims to investigate the influence of systemic banking crises, currency crises and global financial crisis on the relationship between export and economic growth in China by using the annual time series data from the period of 1972 to 2014. Design/methodology/approach - The Johansen and Jeuuselius’ cointegration, auto regressive distributed lag bound testing cointegration, Gregory and Hansen’s cointegration and pooled ordinary least square techniques with error correction model have been used. Findings - Results indicate the positive and significant effect of export of goods and services on economic growth in both long and short run, whereas the negative influence of systemic banking crises and currency crises over economic growth is observed. It is also concluded that the impact of export of goods and service on economic growth becomes insignificant in the presence of systemic banking crises and currency crises. The currency crises effect the influence of export on economic growth to a higher extent compared to systemic banking crises. Surprisingly, the export in the period of global financial crises has a positive and significant influence over economic growth in China, which conclude that the global financial crises did not drastically affect the export-growth nexus. Originality/value - This paper makes a unique contribution to the literature with reference to China, being a pioneering attempt to investigate the effects of systemic banking crises and currency crises on the relationship of export and economic growth by using long-time series data and applying more rigorous econometric techniques.

Keywords: China; Economic growth; Exports; Currency crises; Systemic banking crises (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jcefts:jcefts-04-2016-0012

DOI: 10.1108/JCEFTS-04-2016-0012

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