The Causal Relationship between Imports and Economic Growth in the Nine Provinces of South Africa: Evidence from Panel-Granger Causality Tests

Tsangyao Chang, Beatrice Desiree Simo-Kengne () and Rangan Gupta

No 201320, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper examines the causal relationship between imports and growth in nine provinces of South Africa for the period 1996-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across regions. Our empirical results support unidirectional causality running from economic growth to imports for Gauteng, Mpumalanga, North West, and Western Cape; a bi-directional causality between imports and economic growth for KwaZulu-Natal; and no causality in any direction between economic growth and imports for the rest of provinces. This suggests that import liberalisation might not be an efficient strategy to improve provincial economic performance in South Africa. Indeed, provincial imports tend to increase in some provinces as economic growth improves.

Keywords: Imports; Economic Growth; Dependency and Heterogeneity; Panel Causality Test (search for similar items in EconPapers)
JEL-codes: C33 F14 R11 R12 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2013-04
New Economics Papers: this item is included in nep-afr and nep-fdg
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Citations: View citations in EconPapers (4)

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Working Paper: The Causal Relationship between Exports and Economic Growth in the Nine Provinces of South Africa: Evidence from Panel-Granger Causality Tests (2013)
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