EXPORT DIVERSIFICATION AND ECONOMIC GROWTH: EVIDENCE FROM EMERGING EONOMIES

Abstract

Although export expansion is considered to be an important component of development strategies, how and what type of exports contributes to economic growth has been still an open question. As a matter of fact, the export promotion also does not necessarily lead to economic growth.Revealing the true effect requires considering not only macroeconomic conditions and market structure of exporting countries but also what products and services these countries export. In this context, this paper not only investigates the long run relationship between economic growth, export diversification and domestic investment using panel cointegration techniques but also examines the causal relationship between these variables employing the causality test of Konyá (2006) in 19 emerging economies for the period 1995 - 2017. Panel cointegration test results do not provide evidence of a long run relationship between the variables while Konyá's (2006) causality test reveals various results for different countries.