Exports, imports, government consumption and economic growth in upper-middle income countries

Minh Quang Dao
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Minh Quang Dao: Eastern Illinois University, Illinois, USA

Progress in Development Studies, 2014, vol. 14, issue 2, 197-204

Abstract: Esfahani ( 1991 ) shows that the statistically significant correlation between export promotion and economic growth in semi-industrialized countries (SICs) has been mainly attributable to the role of exports in reducing import ‘shortages’, which have impeded output growth in these countries. As a result, export-promotion policies as a superior development strategy in SICs play an important role in those that cannot secure sufficient foreign aid or investment. Esfahani ( 1991 ) also develops a simultaneous equations model to address the simultaneity bias between GDP and export growth rates. In this article we extend the model developed by Esfahani ( 1991 ) by incorporating the contribution of government consumption to output growth and test it using a sample of 27 upper-middle income economies.

Keywords: exports; imports; government consumption; economic growth; upper-middle income countries (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:prodev:v:14:y:2014:i:2:p:197-204

DOI: 10.1177/1464993413517791

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