Evidence on the Export-Led Growth Hypothesis: The Jordanian Case

Said M. Alkhatib

Abstract


This paper examines the export-led growth hypothesis using Jordanian monthly data over the period 1997.03 -2003.12. The univariate Autoregressive Integrated Moving Average (ARIMA) models are used to filter real exports and industrial production index series to white noise. The cross-correlation function is used in testing the independence hypothesis of exports and industrial production index by employing Koch-Yang test at different lag lengths. The results provide empirical evidence supporting the export-led hypothesis in the short-run only at the 5% level of significance. However, this relationship tends to support the hypothesis of independence when longer lags are used. The result based on Granger test shows a unidirectional causation from export to industrial production index at 10% level of significance. These findings lend support to the export-oriented strategy pursued by Jordan over the sample period examined.

Keywords


Granger-causality, Koch-Yang Test, Independence, ADF Test, Data Stationarity

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