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 languageEnglish
Publication statusPublished - 2000
Externally publishedYes
EventThe Seventh International Convention of the East Asian Economic Association - Pan-Pacific Hotel, Singapore, Singapore, Singapore
Duration: 17 Nov 200018 Nov 2000
Conference number: 7
http://www.eaeaweb.com/3-eaea-conventions.html (EAEA Conventions)

Conference

ConferenceThe Seventh International Convention of the East Asian Economic Association
Abbreviated titleEAEA
CountrySingapore
CitySingapore
Period17/11/0018/11/00
Internet address

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    Rajaguru, G., & Thangavelu, S. M. (2000). Causality Between Trade and Productivity in Rapidly Developing Asian Countries: A Multivariate VAR Analysis. The Seventh International Convention of the East Asian Economic Association, Singapore, Singapore.