Exports, imports and economic growth in South Korea and Japan: a tale of two economies

ZANG, W. and BAIMBRIDGE, M., 2012. Exports, imports and economic growth in South Korea and Japan: a tale of two economies. Applied Economics, 44 (3), pp. 361-372. ISSN 0003-6846

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Abstract

This paper investigates the relationship between exports, imports and economic growth for South Korea and Japan by constructing a vector autoregression (VAR) model. Causality is examined between real GDP, real exports and real imports. Several principal results emerge from the empirical work. Firstly, the three variables are
cointegrated for both countries, implying that a long-run steady state exists. Secondly, there is evidence of bi-directional causality between imports and economic growth for both countries. Finally, Japan seems to experience export-led growth, while GDP growth in South Korea has a negative effect on export growth. These contrasting
findings could result from export goods in Japan exhibiting greater non-price competitive aspects, although their success fails to trigger a virtuous circle since growth fails to lead to increased exports, whilst for South Korea, output growth leads to a decrease in export growth suggesting a strong domestic market.

Item Type: Journal article
Publication Title: Applied Economics
Creators: Zang, W. and Baimbridge, M.
Publisher: Routledge
Date: 2012
Volume: 44
Number: 3
ISSN: 0003-6846
Divisions: Schools > Nottingham Business School
Depositing User: EPrints Services
Date Added: 09 Oct 2015 10:11
Last Modified: 09 Jun 2017 13:21
URI: http://irep.ntu.ac.uk/id/eprint/9030

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