Export-Led Growth Hypothesis: Empirical Facts from Macedonia
15 Pages Posted: 9 Jul 2007
The aim of this study is to empirically test the export-led growth hypothesis in the Republic of Macedonia, as small and open economy. In other words, the question trailed is whether by export promotion the country could impinge on its overall economic development. For that purpose, quarterly data for the period 1998-2006 are plugged into the production function, in which the exports variable plays dominant role, utilized in cointegration testing and vector error correction model. The core findings are supportive to the ELG in Macedonia in the short- and long-run simultaneously. Also, gross capital formation is significant in explaining growth in Macedonia.
Keywords: Export-led growth, Macedonia, Cointegration analysis, Vector error correction model
JEL Classification: C22, C51, F43, O40
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