Causality Between Trade and Productivity in Rapidly Developing Asian Countries: A Multivariate VAR Analysis

Gulasekaran Rajaguru; Shandre M Thangavelu

Causality Between Trade and Productivity in Rapidly Developing Asian Countries: A Multivariate VAR Analysis

Gulasekaran Rajaguru, Shandre M Thangavelu

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Abstract

The paper investigates the causal relationship between trade and labour productivity for 10 rapidly developing Asian countries using a Vector Error-Correction Model. In particular, exports and imports are used jointly as trade variables to examine the relationship between trade and productivity. The study found evidence of import-led rather than export-led productivity growth for some of the Asian countries. The long-run result shows that there is no effect from exports to labour productivity growth for Indonesia, Korea, Japan, and Taiwan; thus suggesting that there is no export-led productivity growth in these countries. However, we do find significant effects from imports on productivity growth, suggesting import-led productivity growth in Korea and Japan. The results also show both export and import-led productivity growth for India, Malaysia, Singapore and Thailand. Also, we found evidence of only export-led productivity growth for Hong Kong.

Original language	English
Publication status	Published - 2000
Externally published	Yes
Event	The Seventh International Convention of the East Asian Economic Association - Pan-Pacific Hotel, Singapore, Singapore, Singapore Duration: 17 Nov 2000 → 18 Nov 2000 Conference number: 7 http://www.eaeaweb.com/3-eaea-conventions.html (EAEA Conventions)

Conference

Conference	The Seventh International Convention of the East Asian Economic Association
Abbreviated title	EAEA
Country/Territory	Singapore
City	Singapore
Period	17/11/00 → 18/11/00
Internet address	http://www.eaeaweb.com/3-eaea-conventions.html (EAEA Conventions)

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Cite this

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title = "Causality Between Trade and Productivity in Rapidly Developing Asian Countries: A Multivariate VAR Analysis",

abstract = "The paper investigates the causal relationship between trade and labour productivity for 10 rapidly developing Asian countries using a Vector Error-Correction Model. In particular, exports and imports are used jointly as trade variables to examine the relationship between trade and productivity. The study found evidence of import-led rather than export-led productivity growth for some of the Asian countries. The long-run result shows that there is no effect from exports to labour productivity growth for Indonesia, Korea, Japan, and Taiwan; thus suggesting that there is no export-led productivity growth in these countries. However, we do find significant effects from imports on productivity growth, suggesting import-led productivity growth in Korea and Japan. The results also show both export and import-led productivity growth for India, Malaysia, Singapore and Thailand. Also, we found evidence of only export-led productivity growth for Hong Kong.",

author = "Gulasekaran Rajaguru and Thangavelu, {Shandre M}",

year = "2000",

language = "English",

note = "The Seventh International Convention of the East Asian Economic Association, EAEA ; Conference date: 17-11-2000 Through 18-11-2000",

url = "http://www.eaeaweb.com/3-eaea-conventions.html",

}

TY - CONF

T1 - Causality Between Trade and Productivity in Rapidly Developing Asian Countries: A Multivariate VAR Analysis

AU - Rajaguru, Gulasekaran

AU - Thangavelu, Shandre M

N1 - Conference code: 7

PY - 2000

Y1 - 2000

N2 - The paper investigates the causal relationship between trade and labour productivity for 10 rapidly developing Asian countries using a Vector Error-Correction Model. In particular, exports and imports are used jointly as trade variables to examine the relationship between trade and productivity. The study found evidence of import-led rather than export-led productivity growth for some of the Asian countries. The long-run result shows that there is no effect from exports to labour productivity growth for Indonesia, Korea, Japan, and Taiwan; thus suggesting that there is no export-led productivity growth in these countries. However, we do find significant effects from imports on productivity growth, suggesting import-led productivity growth in Korea and Japan. The results also show both export and import-led productivity growth for India, Malaysia, Singapore and Thailand. Also, we found evidence of only export-led productivity growth for Hong Kong.

AB - The paper investigates the causal relationship between trade and labour productivity for 10 rapidly developing Asian countries using a Vector Error-Correction Model. In particular, exports and imports are used jointly as trade variables to examine the relationship between trade and productivity. The study found evidence of import-led rather than export-led productivity growth for some of the Asian countries. The long-run result shows that there is no effect from exports to labour productivity growth for Indonesia, Korea, Japan, and Taiwan; thus suggesting that there is no export-led productivity growth in these countries. However, we do find significant effects from imports on productivity growth, suggesting import-led productivity growth in Korea and Japan. The results also show both export and import-led productivity growth for India, Malaysia, Singapore and Thailand. Also, we found evidence of only export-led productivity growth for Hong Kong.

M3 - Presentation

T2 - The Seventh International Convention of the East Asian Economic Association

Y2 - 17 November 2000 through 18 November 2000

ER -

Causality Between Trade and Productivity in Rapidly Developing Asian Countries: A Multivariate VAR Analysis

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