Research on the Relationship between Foreign Trade and the GDP Growth of East China—Empirical Analysis Based on Causality
- 1
- 2
- 3
Abstract
In open economy, development of foreign trade greatly impacts GDP growth. Adopt modern testing methods like unit root, timeseries cointegration analysis and error correction model for researching the causalities between foreign trade including total export and import with the collected 28year statistical data of east China from 1981 to 2008, including total export and total import and GDP growth of east China. The result suggests that there exist long term or short termcausality between GDP and total export and import as well as between GDP and export, foreign trade is the long term and short term reason of GDP growth, but no evidence can prove that there exists long term stationary causality between import trade and GDP. This paper finally provides with some instructive recommendations on how to develop the foreign trade of east China under the new global economy environment.
- Y. H. Li and X. Y. Wang, “Research on the Relation ship between Foreign Trade and the GDP Growth of So uth-west Minority Region of ChinaEmpirical Analysis Based on the Panel Causality,” IEEE International Conference on Industrial Engineering and Engineering Management, Hongkong, December 2009, pp. 798802.
- Y. H. Li and K. Y. Deng, “An Empirical Study on the Contribution of Foreign Trade to the Economic Growth of Southwest Minority Region of China,” International Conference on Computational Intelligence and Software Engineering, Wuhan, December 2009, pp. 14.
- A. Levin, C.F. Lin and C. Chu, “Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties,” Journal of Econometrics, Vol. 108, No. 1, 2002, pp. 124.
- J. Love, “Engines of Growth: the Exports and Government Sectors,” World Economy, Vol. 17, No. 2, 1994, pp. 203218.
- W. S. Jung and P. J. Marshall, “Export, Growth and Cau-sality in Developing Countries,” Journal of Development Economics, Vol. 18, No. 2, 1985, pp. 112.
- P. C. Y. Chow, “Causality between Export and Industrial Development: Empirical Evidence from NICs,” Journal of Development Economics, Vol. 26, No. 1, 1987, pp. 55 63.
- C. Kao, “Spurious Regression and ResiduaL2based Tests f or Cointegration in Panel Data,” Journal of Econometrics, Vol. 90, No. 1, 1999, pp. 144.
- K. S. Im, H. Pesaran and Y. Shin, “Testing f or Unit Roots in Heterogeneous Panels,” Journal of Econometrics, Vol. 115, No. 1, 2003, pp. 5374.
- E. Helpman and P. R. Krugman, “Market Structure and Foreign Trade,” MIT Press, Cambridge, 1985.