Please enter verification code
Are Exports Productivity Enhancing? A Panel Analysis of Sub-Sahara Africa
International Journal of Economics, Finance and Management Sciences
Volume 5, Issue 2, April 2017, Pages: 113-120
Received: Jan. 5, 2017; Accepted: Jan. 19, 2017; Published: Mar. 1, 2017
Views 2081      Downloads 146
Olumuyiwa Olamade, Department of Economics, College of Social and Management Sciences, Caleb University Imota, Lagos, Nigeria
Oluwasola Oni, Department of Economics, College of Social and Management Sciences, Caleb University Imota, Lagos, Nigeria
Article Tools
Follow on us
This paper examines the long-run relationship between exports and economic growth in Sub-Sahara Africa (SSA) to ascertain, if and how, exports drives economic growth through the productivity channel as opposed to volume contribution of exports to gross domestic product (GDP). We sampled seven SSA countries for the study including six of the most competitive countries in SSA by the Global Competitiveness Report ranking. Applying the panel analysis framework to a data set spanning 1987 to 2014, we found cointegration among non-exports GDP, gross capital formation, human capital, exports and imports. Estimates of the parameters of the cointegrating equation show a significant negative relationship between non-exports GDP and exports, suggesting that exports are productivity reducing in the long-run. However, there is a significant bi-directional causality between exports and economic growth. We conclude that, the dynamic effects of exports on growth through an economy-wide productivity increase are best achieved with the industrial sector as the leading exports sector.
Exports, Growth, Long-Run, Sub-Sahara Africa, Productivity
To cite this article
Olumuyiwa Olamade, Oluwasola Oni, Are Exports Productivity Enhancing? A Panel Analysis of Sub-Sahara Africa, International Journal of Economics, Finance and Management Sciences. Vol. 5, No. 2, 2017, pp. 113-120. doi: 10.11648/j.ijefm.20170502.15
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Squire, L. (1993). Fighting Poverty. American Economic Review Paper and Proceedings, 83 (2), 377-382.
Esterly, W. (2002). Inequality Does Cause Underdevelopment, Centre for Global Development Working Paper, 1. Washington, D. C.
Balassa B, (1978) Exports and economic growth: further evidence. Journal of Development Economics, 5, 181-189.
Palley, T. I. (2003) Export-Led Growth: Evidence of Developing Country Crowding-out. In Arestis, Baddeley, & McCombie (Eds). Economic Integration, Regionalism, and Globalization, Cheltenham: Edward Elgar.
Kónya L. (2004). Export-Led Growth, Growth-Driven Export, Both Or None? Granger Causality Analysis on OECD Countries. Applied Econometrics and International Development. Aeeade. 4-1.
Chia, Y. E. (2015). Exports-led growth hypothesis: empirical evidence from selected African Countries. Procedia Economics and Finance, 35, 232-240.
Siliverstovs, B. & Herzer, D. (2007). Manufacturing exports, mining exports, and growth: cointegration and causality analysis for Chile (1960-2001). Applied Economics, 39, 153-167.
Helpman, E. & Krugman, P. (1985). Market structure and foreign trade. MIT Press, Cambridge, Mass.
Ray, S. (2011). A causality analysis on the empirical nexus between export and economic growth: evidence from India. International Affairs and Global Strategy, 1, 24-38.
Feder, G. (1983). On exports and economic growth. Journal of Development Economics, 12, 59-73.
Sachs, J. & Warner, A. (1995). Natural resource abundance and economic growth. NBER Working Paper, 5398.
Herzer, D. (2007). How does trade composition affect productivity? Evidence for Chile. Applied Economics, Letters 14, 909-912.
Dawe, D. (1996) A new look at the effects of export instability on investment and growth. World Development, 24, 1905-1914.
Dreger, C. & Herzer, D. (2012). A further examination of the export-led growth hypothesis. FIW Working Paper, 84.
Edwards S (1993) Openness, trade liberalisation, and growth in developing countries. Journal of Economics Literature, 31, 1358-1393.
Giles, J A & Williams CL (2000). Export-led growth: a survey of the empirical literature and some non-causality results. Part 1. Journal of International Trade and Economic Development 9: 261-37.
Kravis, I. B. (1970). Trade as a handmaiden of growth: Similarities between the nineteenth and twentieth centuries, Economic Journal, 80 (320), 850-72.
Michaely, M. (1977) Exports and growth: an empirical investigation. Journal of Development Economics, 4, 49- 53.
Bhagwati, J. (1978). Anatomy and Consequences of Exchange Control Regimes: Liberalization Attempts and Consequences. Cambridge, MA: Ballinger.
Fajana O. (1979) Trade and Growth: The Nigerian Experience. World Development, 7, 73–78.
Tyler, W. (1981). Growth and export expansion in developing countries: some empirical evidence. Journal of Development Economics, 9, 121-130.
Heitger, B. (1987). Import protection and export performance: their impact on economic growth, Weltwirtschaffliches Archiv, 123 (2) 249-61.
Lussier, M. (1993). Impacts of exports on economic performance: A comparative study”, Journal of African Economies, 2 (1), 106-27.
Colombatto, E. (1990). An analysis of exports and growth, Kyklos, 43 (4), 579-97.
Granger, C. W. J. (1969). Investigating causal relationships by econometric models and cross-spectral methods. Econometrica, 37, 424–438.
Sims, C. A. (1972). Money, income, and causality. American Economic Review, 62, 540-552.
Afxentiou, P. C. & Serletis, A. (1991). Exports and GNP Causality in the Industrial Countries: 1950-1985. Kyklos, vol. 44, pp. 167-79.
Jung, W. S, & Marshall, P. J. (1985) Exports, growth and causality in developing countries. Journal of Development Economics, 18, 1-12.
Darrat, A. F. (1987). Are exports an engine of growth? Another look at the evidence”, Applied Economics, 19, 2 (February): 277-83.
Bahmani-Oskooee M., Mohtadi, H., & Shabsigh, G. (1991) Exports, growth and causality: a re-examination. Journal of Development Economics, 36, 405-415.
Dodaro, S. (1993) Exports and growth: a reconsideration of causality. Journal of Developing Areas, 27, 227-244.
Chow, P. C. Y (1987) Causality between export growth and industrial development: Empirical evidence from NICs. Journal of Development Economics, 26, 55-63.
Bahmani-Oskooee M, & Alse, J. (1993). Export growth and economic growth: An application of cointegration and error correction modelling. Journal of Developing Areas 27, 535-542.
Love, J. & Chandra, R. (2004) Testing export-led growth in India, Pakistan and Sri Lanka using a multivariate framework. Manchester School, 72: 483-96.
Bahmani-Oskooee, M. & Oyolola, M. (2007) Export growth and output growth: an application of bounds testing approach. Journal of Economics and Finance, 31, 1-11.
Bahmani-Oskooee, M. & Economidou, C. (2009). Export-led growth vs. growth-led exports: LDCs experience. Journal of Developing Areas, 42 (2), 179-212.
Bahmani-Oskooee, M., Economidou, C, & Goswami, G. G. (2005) Export-led growth hypothesis revisited: a panel cointegration approach. Sci J Admin Development 3, 40-55.
Reppas, P. A, & Christopoulos, D. K. (2005) The export-output growth nexus: evidence from African and Asian countries. Journal of Policy Modeling 27: 929-940.
Parida, P. C., & Sahoo, P. (2007). Export-led growth in South Asia: a panel cointegration analysis. International Economics Journal 21, 155-176.
Jun, S. (2007). Bi-directional relationships between exports and growth: a panel cointegration analysis. Journal of Economic Research, 12, 133-171.
Foster, N. (2006). Exports, growth and threshold effects in Africa. Journal of Development Studies 42, 1056–1074.
Pazim, K. H. (2009). Panel data analysis of export-led growth hypothesis in BIMP-EAGA Countries. University Library of Munich, Germany.
Mehrara, M. & Firouzjaee, B. A. (2011). Granger causality relationship between export growth and GDP growth in developing countries: panel cointegration approach. International. Journal of Humanities Social Science, 1, 223–231.
Bbaale, E. & Mutenyo, J. (2011). Export composition and economic growth in Sub-Saharan Africa: a panel analysis. Consilience: The Journal of Sustainable Development. 6 (1), 1–19.
Grossman, G., & Helpman, E. (1991). Innovation and Growth in the Global Economy. MIT Press, Cambridge, MA.
Mazumdar, J. (2001). Imported machinery and growth in LDCs. Journal of Development Economics, 65, 209-224.
Eaton, J., & Kortum, S. (2001). Trade in capital goods. European Economic Review, 45, 1195-123.
Caselli, F., & Wilson, D. J. (2004). Importing technology. Journal of Monetary Economics, 51, 1-32.
Levin, A., Lin C-F, and Chu, C-SJ (2002). Unit root test in panel data: asymptotic and finite-sample properties. Journal of Econometrics 108, 1-24.
Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115, 53-74.
Pedroni, P. (2000). Fully modified OLS for the heterogeneous cointegrated panels. Advances in Econometrics, 15, 93-130.
Pedroni, P., 2004. Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20, 597-625.
Kao, C. (1999). Spurious Regression and Residual-Based Tests for Cointegration in Panel Data. Journal of Econometrics, 90, 1-44.
Kao, C. & Chiang, M (2000). On the estimation and inference of a cointegrated regression in panel data. Advances in Econometrics, 15, 179-222.
Kunst, R. M. and Marin, D. (1989). On exports and productivity: a causal analysis. Review of Economics and Statistics, 71, 699–703.
United Nations Commission for Africa (2015). Economic Report on Africa 2015: Industrializing through trade. Addis Ababa.
Edwards, S. (1988). Terms of trade, tariffs, and labor-market adjustment in developing countries. World Bank Economic Review, 2, 165-185.
World Bank (2009). Doing business 2009. Coparing regulation in 181 economies. Working Paper No. 5398. Washington, D.C.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186