The Relationship of Total Factor Productivity, Economic Growth and Exports: The Case of Developing Countries

Abstract

Total factor productivity, economic growth and exports are important macroeconomic sizes, especially for developing economies. In this study, the relationship between these three sizes is analyzed with the data of 1990-2017 for 26 developing countries in the upper middle income countries group according to the current income grouping criteria of the World Bank. In the study in which panel causality analysis is used, one-way causality relationship is found between total factor productivity and exports from total factor productivity to exports. Bidirectional causality is also found between total factor productivity and economic growth. Findings indicate that, total factor productivity is one of the main causes of growth and exports in developing countries

Keywords

• total factor productivity
• economic growth
• exports
• panel causality