On Non-Linearities between Exports of Manufactures and Economic Growth

Journal of Applied Economics, Vol. 4, No. 2, pp. 279-311, November 2001

Posted: 2 Jul 2004

See all articles by César A. Calderón

César A. Calderón

Central Bank of Chile

Alberto Chong

University of Ottawa

Luisa Zanforlin

International Monetary Fund (IMF) - European Department; World Bank

Abstract

Building up human capital and other complementarities may be important in the link between exports of manufactures and economic growth. On the other hand, managerial strategies that push for export promotion may be important, too. Though both may yield non-linearities in the link between exports and growth, the associated patterns differ. In this paper we take an aseptic, empirical view in the link between these two variables and the possible non-linear links. Since direct testing for non-linearities in panel data may yield non-significant results although they may actually be present, we propose a very simple method that may serve as a first approximation to uncover such non-linearities. We also take into consideration endogeneity and reverse causality problems (Arellano and Bover, 1995), and definitional problems in our variable of interest. In fact, we use a panel of 96 countries for the period 1960-1995 and find evidence consistent with the presence of non-linearities. We apply formal sensitivity analysis and confirm the results.

Keywords: Growth, exports, dynamic panel data, endogeneity

JEL Classification: 039, 040

Suggested Citation

Calderon, Cesar A. and Chong, Alberto and Zanforlin, Luisa, On Non-Linearities between Exports of Manufactures and Economic Growth. Journal of Applied Economics, Vol. 4, No. 2, pp. 279-311, November 2001, Available at SSRN: https://ssrn.com/abstract=560724

Cesar A. Calderon (Contact Author)

Central Bank of Chile ( email )

Agustinas 1180
Santiago
Chile

Alberto Chong

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

Luisa Zanforlin

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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