An Empirical Analysis of the ASEAN-4's Causality between Exports and Output Growth

Abstract

This paper specifically focuses on analysing the causality between real GDP and real export of goods and services of the ASEAN-4 countries (Indonesia, Malaysia, Thailand and the Philippines) by using comprehensive econometric techniques such as the unit root test, cointegration test, and error correction model. This study reveals that for short-run dynamics, while bi-directional Granger-causality exists in Malaysia, the Philippines, and Thailand; the unidirectional Granger-causality runs from GDP growth to EXP growth for Indonesia. While the long-run relationship shows a bidirectional Granger-causality between GDP and EXP growth for Malaysia and Thailand, GDP growth Granger-caused EXP growth for Indonesia and an inverse relationship exists between these two variables for the Philippines. Keywords: ASEAN-4, Causality, Exports-Output Growth. JEL Classifications: O1, O2, O4, O5