Trade-led growth hypothesis: evidence from Latin America countries

Vinícius Luís Souza Nonato and Carlos Carrasco-Gutierrez
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Vinícius Luís Souza Nonato: Catholic University of Brasilia (UCB)

Empirical Economics, 2023, vol. 64, issue 2, No 6, 727-745

Abstract: Abstract In this paper, we investigate the relationships between trade and labor productivity for nine Latin American countries in terms of the trade-led growth hypothesis. We use a vector error-correction model and perform independent tests of the short-run and long-run relationship among exports, imports and productivity to examine the direction of causality. The results show that exports and imports have impacts on labor productivity. We find evidence that the export‐led growth hypothesis is significant for Bolivia, Chile and Mexico; the growth‐led export hypothesis is significant for Uruguay; the import‐led growth hypothesis is relevant for Brazil, Colombia and Mexico; and the growth‐led import hypothesis is relevant for Brazil, Colombia and Uruguay. Finally, we note an important role of imports in the long-run development of these economies.

Keywords: Economic growth; Export-led growth; Import-led growth; Latin America; Cointegration; Causality (search for similar items in EconPapers)
JEL-codes: B23 C01 F10 F14 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00181-022-02266-w

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