Is there an export or import-led productivity growth in rapidly developing Asian countries? A multivariate VAR analysis

Shandre Mugan Thangavelu*, Gulasekaran Rajaguru

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

58 Citations (Scopus)


In contrast to cross-country studies, the paper investigates the relationships between trade and labour productivity for nine rapidly developing Asian countries in a time-series framework using a vector error-correction model. Independent tests on the long-run and short-run relationship between trade variables of exports and imports and productivity are conducted. The results suggest that trade has an important impact on productivity and output growth in the economy, however it is imports that provide the important 'virtuous' link between trade and output growth. The results indicate that exports and imports have qualitatively different impacts on labour productivity. The long-run result shows that there is no causal effect from exports to labour productivity growth for Hong Kong, Indonesia, Japan, Taiwan and Thailand; thereby suggesting that there is no export-led productivity growth in these countries. However, significant causal effects were found from imports to productivity growth, suggesting import-led productivity growth in India, Indonesia, Malaysia, Philippines, Singapore and Taiwan. In addition, the results indicate that imports tend to have greater positive impact on productivity growth in the long run.

Original languageEnglish
Pages (from-to)1083-1093
Number of pages11
JournalApplied Economics
Issue number10
Publication statusPublished - 10 Jun 2004
Event35th Annual Meeting of the Canadian Economic Association: presented by Shandre M. Thangavelu - McGill University, Montréal, Québec, Montréal, Canada
Duration: 31 May 20013 Jun 2001
Conference number: 35th (CEA 2001 Home Page)


Cite this