Testing the export-led growth hypothesis: evidence from Jordan

Abstract

The purpose of this study is to empirically investigate the export-led growth hypothesis in Jordan over the period 1976–1997. The empirical results from three bivariate models of VAR-L, VAR-D and ECM indicate a unidirectional causation from exports to output. These findings lend support to the export-oriented growth strategy pursued by Jordan. In promoting faster economic growth, such government institutions as Free Zones Corporations, Jordan Investment Board and Jordan Export Development Corporation should continue pursuing their mission in attracting foreign investments and boosting exports.

Notes

¹ See Jordan Investment Board (2000).

² See Central Bank of Jordan (2001).

³ The bivariate models in Equations 1–3 in Table 1 assume that X _t and Y _t , are both either I(0) or I(1).

⁴ Due to the additional controlled variables in the ECM, the calculations of the FPE statistics using Equations 4 and 5 take into account the change in the degrees of freedom.