The Relationship between Export and Economic Growth in Ethiopia
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Date
2014-06
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Addis Ababa University
Abstract
The relationship between exports and economic growth has been a popular subject
of debate among development economists. The aim of this paper is to test the
relationship between export and economic growth in Ethiopian economy from
1975-76 to 2010/11. A bi-variate model is specified and estimated by using
cointegration tests and error correction model. From the estimation of the specified
model, we reported that there is a positive relationship between export and
economic growth in the longrun and short run at 5 percent significance level and
evidence in support of the export-led growth (ELG) hypothesis in that export
growth has a causal influence on economic growth.
From a policy perspective, the acceptance of the ELG hypothesis lends credence to
the view of ‘outward orientation’ as an effective policy for economic growth.
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Keywords
Relationship between Export