Export linkage to economic growth: evidence from Iran

Abstract

Purpose

The purpose of this paper is to test the export‐led growth hypothesis for Iran.

Design/methodology/approach

This is done through an investigation of causal relationship between exports and economic growth, based on Hsiao's synthesis and Akaike's optimal lag criterion, and then by examining the impact of disaggregated exports on economic growth. Using annual time series data, it covers the period of 1970‐2001.

Findings

The evidence supports the export‐led growth hypothesis for aggregate exports. This is not due to accounting effect; since the results indicate that real export growth also causes net‐real GDP growth for Iran. In examining the effects of decomposition of exports and growth, while oil exports are found to have a very important role, manufactured exports are suggested to have the potential to bear further growth in the future.

Originality/value

The paper provides evidence from Iran linking exports to economic growth.

Citation

Atrkar Roshan, S. (2007), "Export linkage to economic growth: evidence from Iran", International Journal of Development Issues, Vol. 6 No. 1, pp. 38-49. https://doi.org/10.1108/14468950710830545