Export-led growth in the UAE: multivariate causality between primary exports, manufactured exports and economic growth

The principal question that this research addresses is the validity of the Export-Led Growth hypothesis (ELG) in the United Arab Emirates (UAE) over the period 1981–2012, focusing on the causality between primary exports, manufactured exports and economic growth. Unit root tests are applied to exami...

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Bibliographic Details
Published inEurasian business review Vol. 8; no. 3; pp. 341 - 365
Main Authors Kalaitzi, Athanasia S., Cleeve, Emmanuel
Format Journal Article
LanguageEnglish
Published Cham Springer International Publishing 01.09.2018
Springer Nature B.V
Subjects
Business and Management
Causality
Cointegration analysis
Economic growth
Economic models
Emerging Markets/Globalization
Entrepreneurship
Exports
Hypotheses
Innovation/Technology Management
Manufactured products
Original Paper
C22
O47
F43
Economic growth
UAE
Diversification
Causality
Export-led Growth
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Summary:The principal question that this research addresses is the validity of the Export-Led Growth hypothesis (ELG) in the United Arab Emirates (UAE) over the period 1981–2012, focusing on the causality between primary exports, manufactured exports and economic growth. Unit root tests are applied to examine the time-series properties of the variables, while the Johansen cointegration test is performed to confirm or not the existence of a long-run relationship between the variables. Moreover, the multivariate Granger causality test and a modified version of Wald test are applied to examine the direction of the short-run and long-run causality respectively. The cointegration analysis reveals that manufactured exports contribute more to economic growth than primary exports in the long-run. In addition, this research provides evidence to support a bi-directional causality between manufactured exports and economic growth in the short-run, while the Growth-Led Exports (GLE) hypothesis is valid in the long-run for UAE.
ISSN:1309-4297
2147-4281
DOI:10.1007/s40821-017-0089-1