Export-led growth hypothesis: Empirical evidence from the Southern  African Customs Union countries

Malefa Rose Malefane

doi:10.15678/EBER.2021.090204

Vol. 9 No. 2 (2021)
June 2021

Articles

Export-led growth hypothesis: Empirical evidence from the Southern African Customs Union countries

Published 2021-06-01

Malefa Rose Malefane

Malefa Rose Malefane
University of South Africa

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How to Cite

Malefane, M. R. (2021). Export-led growth hypothesis: Empirical evidence from the Southern African Customs Union countries. Entrepreneurial Business and Economics Review, 9(2), 55-69. https://doi.org/10.15678/EBER.2021.090204

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DOI:

https://doi.org/10.15678/EBER.2021.090204

Abstract

Objective: The objective of the article is to examine the export-led growth hypothesis in the Southern African Customs Union (SACU).

Research Design & Methods: This study employs annual data on output, exports, imports, and a structural dummy variable for SACU countries, namely, South Africa, Botswana, Lesotho, Namibia, and eSwatini. The study applies the cointegration test based on the Johansen (1988) and the Johansen and Juselius (1990) approach, followed by the vector error correction model and the trivariate Granger causality analysis.

Findings: All SACU countries, apart from Lesotho, have witnessed a significant positive relationship between exports and economic growth during the reviewed period. In the case of Lesotho, the study finds a negative relationship between exports and economic growth. Causality results confirm that the export-led growth hypothesis is valid in Namibia and South Africa, but not in eSwatini, Botswana, and Lesotho.

Implications & Recommendations: Based on the overall findings, this study mainly recommends that policymakers in SACU countries should consider providing extensive support for the development of infrastructure and trade-related logistics.

Contribution & Value Added: SACU countries rely on a narrow range of exports, which could affect their vulnerability to external shocks. This article provides empirical evidence on whether data from SACU countries is consistent with the export-led growth hypothesis.

Keywords

exports; imports; economic growth; SACU; multivariate Granger causality, export-led growth, Africa, Southern African Customs Union

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Author Biography

Malefa Rose Malefane

PhD in Economics (University of South Africa). Her research interests include international trade and economic growth - focusing on trade policy and the effects of economic integration in emerging economies.

Correspondence to: Dr Malefa Rose Malefane, PhD, University of South Africa, Department of Economics, Anton Lembede Building Room 4-41, Pretoria, 0003, South Africa, e-mail: malefmr@unisa.ac.za

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