The trade led-growth hypothesis in China and G8 countries: pooled mean group estimation
by Khalid Usman
International Journal of Computational Economics and Econometrics (IJCEE), Vol. 14, No. 4, 2024

Abstract: This research aims to examine the trade-led growth (TLG) hypothesis, especially the relationship between trade openness (TRA) and economic growth (GDP) in China and G8 (UK, Russia, Canada, USA, France, Italy, Germany, Japan) economies with two threshold variables, labour force (LF) and gross fixed capital formation (GFC). The study explores cointegration among these variables and evaluates their short and long-term effects utilising data from 1992 to 2021. Different tests, including CADF unit root, Westerlund panel cointegration, and pooled mean group estimation (PMG), are used while considering cross-section dependence (CD) and D-H tests. The PMG estimator identifies a positive long-term impact of GFC on GDP in both China and the G8 economies. Conversely, the D-H test exposes no causal relationship between GDP, labour force and gross fixed capital, and trade and gross fixed capital. These findings recommend that policymakers should prioritise trade development by spending on capital formation and labour production to improve economic growth. Furthermore, adopting amplified trade cooperation between China and G8 economies is suggested.

Online publication date: Mon, 07-Oct-2024

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Computational Economics and Econometrics (IJCEE):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com