The South Korean Export Benchmark: Validity of the Export-Led Growth Hypothesis

Mayar Bakeer () and Hebatallah Ghoneim
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Mayar Bakeer: The German University

A chapter in Economics and Finance Readings, 2023, pp 155-179 from Springer

Abstract: Abstract The Export-led growth hypothesis has been a controversial topic and its validity has been under scrutiny even for one of its well-renounced benchmarks, South Korea. The paper explores the causal relation between exports and GDP for South Korea for a time span of 61 years. Unit root tests are implemented and the existence of structural breaks were discovered. Then a cointegration test using the Gregory–Hansen followed by an ARDL and Error correction model. The methodology emphasized the presence of a short-run causality and long-run relationship. Finally, a Toda–Yamamoto Granger causality test showed that there is a bidirectional relation between GDP and Exports. Results shed light on the importance of the shift in the type of goods exported from Light industries to Heavy Chemical industries and how that shift may have been a turning point for the South Korean Economy and the affirmation of the ELGH.

Keywords: Export; Economic growth; Unit Root; Structural break; Gregory–Hansen; ARDL; ECM; Toda–Yamamoto Granger Causality; South Korea; Cointegration (search for similar items in EconPapers)
JEL-codes: C32 F43 O47 O53 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-1979-6_10

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DOI: 10.1007/978-981-99-1979-6_10

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