The effects of uncertainty dynamics on exports, imports and productivity growth

Mahadevan, Renuka and Suardi, Sandy (2011) The effects of uncertainty dynamics on exports, imports and productivity growth. Journal of Asian Economics, 22 2: 174-188. doi:10.1016/j.asieco.2010.11.001


Author Mahadevan, Renuka
Suardi, Sandy
Title The effects of uncertainty dynamics on exports, imports and productivity growth
Journal name Journal of Asian Economics   Check publisher's open access policy
ISSN 1049-0078
Publication date 2011-04-01
Year available 2010
Sub-type Article (original research)
DOI 10.1016/j.asieco.2010.11.001
Volume 22
Issue 2
Start page 174
End page 188
Total pages 15
Place of publication Amsterdam, The Netherlands
Publisher Elsevier
Language eng
Formatted abstract
This paper investigates the trade-productivity growth relationship by incorporating uncertainty/volatility in a VECM-GARCH model. Using Singapore as a case study, we find evidence supporting the crucial role of imports as a beneficial conduit for growth in both total factor productivity (TFP) and labour productivity even after controlling for economic uncertainty in the model. Differences in the causality test results for TFP, labour productivity and trade growth between models with and without uncertainty show the importance of incorporating uncertainty in drawing robust inferences about their causal relationships. The findings that volatility in productivity growth impedes import growth while volatility in export and import growth has varied impacts on productivity growth carry important implications on trade and productivity growth policies not considered before.
Keyword Volatility
Total Factor Productivity
Labour Productivity
GARCH
Trade
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Available online 26 November 2010

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2011 Collection
School of Economics Publications
 
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Created: Mon, 06 Dec 2010, 23:05:37 EST by Alys Hohnen on behalf of School of Economics