Structural Change In Exports and Economic Growth: Evidence From Jordan (1964-2004)

Zakia Mishal

Abstract


This paper analyzes the effects of the growth of exports, manufactured and primary exports on the growth of GDP for Jordan between 1964 and 2004. This contribution shows that structural changes have such an impact on the sources of growth, which in turn will affect the export-growth relationship. A VAR analysis of Jordanian yearly trade and GDP growth has been used; causality tests are applied to the entire period as well as two subperiods. Statistical tests confirm export-led growth for the full period and for the first subperiod, but tests on the recent subperiod 1989-2004, show growth causing primary exports. In addition, there is a bidirectional causal relationship between primary exports and manufactured exports. Therefore, policies in Jordan should not discriminate against the export of primary products. Instead, they should conform to policies that aim at export promotion.

Keywords


Structural Change, Exports, Economic growth, VAR Model.

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