Why does Mexico have to direct its economic growth towards exports in the T-MEC? empirical evidence 1993-2019
DOI:
https://doi.org/10.29201/peipn.v16i31.26Keywords:
exports, economic growth, time series models, cointegration, econometric methodsAbstract
This paper is aimed at examining if there is a causal link between Gross Domestic Product and Exports for the countries that integrate the T-MEC on the basis of cointegration and Granger-causality techniques. The analysis is also extended by using the estimation method of fully modified ordinary least squares (FMOLS). Empirical evidence shows that Gross Domestic Product and Exports of Canada, Mexico and USA are I(1), but when applying the cointegration tests, only the variables belonging to Mexico were cointegrated. Finally, the causality test is applied and it was found that Gross Domestic Product and Exports of Mexico have a causal relationship of a bidirectional type. Therefore, economic policies destined to favor exports will also favor economic growth and vice versa.
Downloads
References
Andrews, D. W. (1991). Heteroskedasticity and autocorrelation consistent covariance matrix estimation. Econometrica, 59(3): 817-858.
Andrews, D. W. y J. C. Monahan (1992). An improved heteroskedasticity and autocorrelation consistent covariance matrix estimator. Econometrica, 60(4): 953-966.
Awokuse, T. O. (2003). Is the export-led growth hypothesis valid for Canada? Canadian Journal of Economics, 36(1): 126-136.
Awokuse, T. O. (2008). Trade openness and economic growth: is growth export-led or import-led? Applied Economics, 40(2): 161-173.
Balassa, B. (1978). Exports and economic growth: further evidence. Journal of Development Economics, 5(2): 181-189.
Borensztein, E.; J. De Gregorio y J. W. Lee (1998). How does foreign direct investment affect economic growth? Journal of International Economics, 45(1): 115-135.
Dhawan, U. and B. Biswal (1999). Re-examining export-led growth hypothesis: a multivariate cointegration analysis for India. Applied Economics, 31(4): 525-530.
Dickey, D. A. and W. A. Fuller (1981). Likelihood ratio statistics for autoregressive time series with a unitroot. Econometrica, 49(4): 1057-1072.
Engle, R. F. and C. W. Granger (1987). Co-integration and error correction: representation, estimation, and testing. Econometrica, 55(2): 251-276.
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3): 231-254.
Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica, 59 (6) 1551-1580.
Kwan, A. C. and J. A. Cotsonitis (1991). Economic growth and the expanding export sector: China 1952–1985. International Economic Journal, 5(1): 105-116.
Kwiatkowski, D.; Phillips, P. C.; Schmidt, P. and Y. Shin (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root? Journal of Econometrics, 54(1-3): 159-178.
Lee, C. C. and P. C. Phillips (1994). An ARMA prewhitened long-run variance estimator. Manuscript, Yale University.
Marin, D. (1992). Is the export-led growth hypothesis valid for industrialized countries? Review of Economics and Statistics, 74(4): 678-688.
Michaely, M. (1977). Exports and growth: an empirical investigation. Journal of Development Economics, 4(1): 49-53.
Newey, W. K. and K. D. West (1987). A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix. Econometrica, 55(3): 703-708.
Panas, E. and G. Vamvoukas (2002). Further evidence on the export-led growth hypothesis. Applied Economics Letters, 9(11): 731-735.
Phillips, P. C. and B. E. Hansen (1990). Statistical inference in instrumental variables regression with I(1) processes. Review of Economic Studies, 57(1): 99-125.
Phillips, P. C. and S. N. Durlauf (1986). Multiple time series regression with integrated processes. Review of Economic Studies, 53(4): 473-495.
Phillips, P. C. and P. Perron (1988). Testing for a unit root in time series regression. Biometrika, 75(2): 335-346.
Phillips, P. C. and S. Ouliaris (1990). Asymptotic properties of residual based tests for cointegration. Econometrica, 58(1): 165-193.
Rodríguez-Benavides, D. and F. Venegas-Martínez (2011). Efectos de las exportaciones en el crecimiento económico de México: un análisis de cointegración, 1929-2009. EconoQuantum, Revista de Economía y Negocios, 7(2): 55-71.
Shan, J. and F. Sun (1998, a). Export-led growth hypothesis for Australia: an empirical re-investigation. Applied Economics Letters, 5(7): 423-428.
Shan, J. and F. Sun (1998, b). On the export-led growth hypothesis: the econometric evidence from China. Applied Economics, 30(8): 1055-1065.
Shan, J. and K. Wilson (2001). Causality between trade and tourism: empirical evidence from China. Applied Economics Letters, 8(4): 279-283.
Shirazi, N. S. and T. A. A. Manap (2005). Export-led growth hypothesis: Further econometric evidence from South Asia. The Developing Economies, 43(4): 472-488.
Stock, J. H. and M. W. Watson (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica, 61(4): 783-820.
Tyler, W. G. (1981). Growth and export expansion in developing countries: Some empirical evidence. Journal of Development Economics, 9(1): 121-130.
Wang, Q., and N. Wu (2012). Long-run covariance and its applications in cointegration regression. Stata Journal, 12(3): 515.
World Bank. 1987. World Development Report 1987: publication summary. Informe sobre el desarrollo mundial 1987. Resumen de una publicacion (Spanish). World Development Report, World Development Indicators. Washington, DC, World Bank Group.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
