<p>The objective of this study is to empirically examine the export-led growth hypothesis in Mozambique using quarterly time series data over the period of 1987-2004, applying a co-integration analysis, Engle and Granger&rsquo / s (1987) Error Correction Model (ECM) and the Granger causality test. The paper explores the causal relationship between economic growth and othe explanatory variables, such as real exports, imports, labour force, gross capital formation, terms of trade, civil war and natural disasters (the last two as dummy variables).</p>

Doctor of Philosophy / Department of Economics / Wayne Nafziger / This dissertation constructs three empirical essays. The first essay illustrates the causality on the relationship between output (GDP) growth and exports. By using the Modified Wald (MWald) test we observe unidirectional causality from exports to GDP. More specifically, for the robustness we use a Vector Error Correction Model (VECM) model and the Generalized Impulse Response Function Analysis (GIRA). The VECM and the GIRA yield bidirectional causality between exports and GDP, which weakly supports the unidirectional result of the to MWald test. Meanwhile, we confirm that there is structure break by using the structural break test. These results are plausible and consistent with the expectations of our study for the Export Led Growth Hypothesis (ELGH). However, compared with previous studies on the ELGH for Korea, our results are different. Other studies show a bidirectional causality relationship but this study only has unidirectional causality. These differences may be caused from different observation data, various variables, and use of different econometric methodologies. Also, model selection and omitting variables can also significantly change the results of causality testing. The second essay investigates a degree of competition between Korea's and China's exports in the U.S. market by using the substitute elasticity on a simple demand model. The market share of Korean exports has been decreasing while that of China's has been increasing. The results of this study are as follows. First, we find that Korea has a dominant market share of only goods group code 27 in commodity groups over that of China, otherwise having China's dominant market shares over those of Korea for other export sections by using historical trade data. Second, most estimates of substitute elasticity between both countries' exports in the U.S. market are small (inelastic). However, 61 (apparel articles and accessories, knit or crochet), 62 (apparel articles and accessories, not knit etc) and 85 (electric machinery etc, sound equipments, TV equipment, parts) commodity groups' substitute elasticities are large (elastic) and are competitive in the U.S. market compared with those of China. A small value of the elasticity of substitution may be due to an identification problem for a simple standard model as well as measurement errors in prices as a unit value in this study. So, in order to avoid problems such as these, we may need to use appropriate instrumental or proxy variables in the simple standard model, which highly correlate with the independent (unit price) variables and are uncorrelated with measurement error terms. In practice, it is not easy to find good instrumental variables. The final essay evaluates the roles of price and income as important factors that affect Korea's exports by using the most recent monthly data. By using the Autoregressive Distributed Lag (ARDL) bounds testing approach we find the long-run relationship of variables and estimate the long-run price and income elasticities. However, the estimates of these long-run elasticities are statistically insignificant. This may be due to some misspecifications or measurement errors in our model. Meanwhile, due to the existence of the long-run relationship between variables, we construct the Error Correction Model (ECM) in order to observe the short-run dynamics of the elasticities. Specifically, we add a dummy variable into our export demand model to achieve more efficient estimations since the dummy variable reflects a shock in Korea's export; Korea's economic crisis in 1997. In contrast to the long-run elasticity, we find that the short-run elasticities' estimates are more statistically significant. When we use the structure break test to check the structural stability of Korea's export demand, we find that there is no structural break point of 1997. Therefore, a shock of Korea's economic crisis in 1997 might not significantly affect Korea's export demand in a given sample. However, the Information Technology (IT) bubble of the world economy in 2001 and the entry of Korea into the OECD had triggered an increase in Korea's export demand due to existing structural break points of both events. In addition, we find that income elasticities are larger than price elasticities in the short run. This implies that income has more of an impact than that of price for the export demand model in the short run. This also implies that the change of Korea's exports in the short run is more sensitive to changes in foreign income (industrial production) compared with that of price (exchange rate). An interesting result, thus, is that Korea's exports in the short run may have higher export performance on income than that of price (exchange rate). This might be a consequence of the dependence of an increase in foreign income in recent years. In recent years, developing countries have greatly increased their economic growth compared with that of developed countries and Korea's exports have increased into these developing countries. Thus, we confirm that an increase in Korea's exports is mainly affected by income compared with price, specifically in the short run by using recent data.

Magister Economicae - MEcon / The objective of this study is to empirically examine the export-led growth hypothesis in Mozambique using quarterly time series data over the period of 1987-2004, applying a co-integration analysis, Engle and Granger(1987) Error Correction Model (ECM) and the Granger causality test. The paper explores the causal relationship between economic growth and othe explanatory variables, such as real exports, imports, labour force, gross capital formation, terms of trade, civil war and natural disasters (the last two as dummy variables). / South Africa

This study uses annual data for the period 1975-2014 for South Africa and Botswana, and 1979-2013 for Lesotho to examine empirically the impact of trade openness on economic growth in these three South African Customs Union (SACU) countries. The motivation for this study is that SACU countries are governed by the common agreement for the union that oversees the movement of goods that enter the SACU area. However, although these countries are in a com-mon union, they have quite different levels of development. Based on the country’s level of development, Lesotho is a lower middle-income and least developed country, whereas Botswana and South Africa are upper middle-income economies. Thus, these disparities in the levels of economic development of SACU countries i are expected to have different implications in relation to the extent to which trade openness affects economic growth. It is within this background that the current study seeks to examine what impact trade openness has on economic growth in each of the three selected countries. To check the robustness of the empirical results, this study uses four equations based on four different indicators of trade openness to examine the linkage between trade openness and economic growth. While Equation 1, Equation 2 and Equation 3 employ trade-based indicators of openness, Equation 4 uses a modified version of the UNCTAD (2012a) trade openness index that incorporates differences in country size and geography. Using the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and error-correction modelling, the study found that the impact of trade openness on economic growth varies across the three SACU countries. Based on the results for the first three equations, the study found that trade openness has a positive impact on economic growth in South Africa and Botswana, whereas it has no significant impact on economic growth in Lesotho. Based on Equation 4 results, the study found that after taking the differences in country size and geography into account, trade openness has a positive impact on economic growth in Botswana, but an insignificant impact in South Africa and Lesotho. For South Africa and Botswana, the main recommendation from this study is that policy makers should pursue policies that promote total trade to increase economic growth in both the short and the long run. For Lesotho, the study recommends, among other things, the adoption of policies aimed at enhancing human capital and infrastructural development as well as the broadening of exports, so as to enable the economy to grow to a threshold level necessary for the realisation of significant gains from trade. / Economics / Ph. D. (Economics)