The Export-led growth hypothesis revisited: Theory and Evidence

Abstract

Exports have been often singled out as a key determinants of fast and sustainable rise in per capita income. In this paper we revisit this export-led growth hypothesis (ELGH). From an empirical point of view we study this phenomenon applying Granger-type tests on panel data. The results seem to confirm that, for the sample of countries and the period under study, exports did behave as the "engine of growth" as they Granger-caused investment, output growth and imports. To capture these empirical features, in the theoretical analysis, we reformulate the ELGH standard model in terms of recent models of endogenous growth.