chapter  4
12 Pages

Trade, Foreign Direct Investment and Economic Growth Linkages in Selected South Asian Countries

ByMd. Saiful Islam and Syed Imran Ali Meerza

Further, the long-and short-run relationships between them have also been estimated by applying cointegration and error correction mechanisms respectively. Such studies, for instance, are Hatemi and Irandoust (2000) for Nordic economies, Graves and Holman (1995) and Awokuse (2005) for Korea. Similarly, Lee and

Pan (2000) investigated eight East Asian countries. Onchoke and In (1994) examined the relationship between export and gross domestic product (GDP) for select South Pacifi c Island nations. Bahmani-Oskooee and Domac (1995) estimated a long-run relationship between Turkish exports and domestic production. Mah (2005) found bi-directional causality in China. Hatemi (2002) investigated the bi-directional causal relationship in Japan and Demirhan and Akcay (2005) found that exports caused economic growth in Morocco and Jordon. Abdulai and Jaquet (2002) found that the causal relationship fl ows from exports to GDP. Ahmad (2001) estimated that causality exists in support of export-led growth hypothesis. Kovacic and Djukic (1991) found a unidirectional causal relationship exists between exports to output in the Yugoslav economy. Jordaan and Eita (2007) analysed the causality between exports and the GDP of the Namibian economy and supported the export-led growth hypothesis by fi nding that export caused GDP and GDP per capita.