The Export-Output Relationship in South Africa: An Empirical Investigation

P. C. Wa Cipamba

Studies in Economics and Econometrics, 2015, vol. 39, issue 1, 25-46

Abstract: This study re-investigates the empirical relationship between exports and economic growth in South Africa using econometric techniques of co-integration and Granger causality over the period 1970Q1-2012Q4. Empirical findings are summarized as follows: (i) there exists a single co-integrating vector among variables; (ii) Granger causality based on a Vector Error Correction model reveals the existence of short and long run bi-directional causality between export and GDP growth; (iii) Granger causality based on the Toda- Yamamoto procedure confirms that export Granger causes GDP in the long run and vice versa. (iv) The analysis of impulse responses suggests that real GDP reacts positively to changes in exports. Overall, the empirical findings of this study support the validity of export-led growth hypothesis as well evidence of growth-driven export in the case of South Africa. The implications for policy include boosting and implementing measures that aim at stimulating both production for exports and output growth.

Date: 2015
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DOI: 10.1080/10800379.2015.12097275

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