Is the Export-Oriented Growth Hypothesis Valid for Armenia?
Abstract
The presented study examines the relevant problems of Exportled growth hypothesis for Armenia.
Aim. The study aims to check if the exportled growth hypothesis is valid for Armenia in term of 1998–2017 or not.
Tasks. To achieve this aim, the authors examine the mechanism of the relationship between export and GDP.
Methods. For this purpose the correlation analysis is performed, as well as the results of Grangercausality test are shown.For this analysis, quarterly data are chosen covering 1998:Q12017:Q4. The analysis is provided by Eviews 4.
Results. The results show that there is a high correlation between export and GDP (0.81). We can state also that the export growth in any quarter causes GDP growth in the same quarter, after 2 quarters, and in the last quarter after 2 years. The GDP growth causes export growth lagged 2–7 periods. The results of the Grangercausality test show that for some period of time the rise in export causes the inflow of foreign currency, which also causes a rise in import. And finally, we revealed that there is a strong positive relationship between the import and GDP, and also we cannot reject the hypothesis “import does not cause GDP growth”.
Conclusions. The analysis shows that the Exportled growth hypothesis is valid for Armenia. The identified mechanism of impact of export on economic growth is the following: export growth causes an inflow of additional foreign currency during 3 months, which causes local currency appreciation and in the next 9 months the growth of import (especially for import of capital goods and raw materials) could be caused. And finally, the outcome is the GDP growth during the next 3.5 years. It must be noted that this process is continuous, as GDP growth causes export growth in the next 7 quarters.
About the Authors
Sergey V. Dokholyan
Institute of Social and Economic Research Dagestan Scientific Center of RAS
Russian Federation
Yаragskogo St. 75, Makhachkala, 367030
Russian Federation
Yаragskogo St. 75, Makhachkala, 367030
Lilit N. Sargsyan
Institute of Economics named after M. Kotanyan of the National Academy of Sciences of the Republic of Armenia
Armenia
Armenia
Grigora Lusavorich St. 15, Yerevan, 0015
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Review
For citations:
Dokholyan S.V., Sargsyan L.N. Is the Export-Oriented Growth Hypothesis Valid for Armenia? Economics and Management. 2019;(2):7-14.
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