The export-led growth hypothesis (ELGH) assumes that export
growth is a key determinant of economic growth. It holds that the overall
growth of countries can be facilitated by not only increasing the amounts of
labor and capital within the economy but also expanding exports. According to
advocates of the ELGH, exports can function as an engine of growth. This
chapter analyzes the relationship between Sudan's income growth and exports
from 1970 to 2020, implementing a system of equations using the Autoregressive
Distributed Lag (ARDL) approach. The ARDL results revealed a long-run
relationship between the variables considered in the estimated model. A
negative lagged error-correction term coefficient was observed, which is highly
significant in all cases supporting cointegration. The result reveals the
existence of a long-run equilibrium relationship between GDP, export, import,
labor force, and trade policy, confirming the validity of the export-led growth
hypothesis in the Sudanese context. Thus, the most essential conclusion is that
the economy’s export expansion strategy is entirely dependent on imports of raw
materials and capital inputs and the kind of goods being exported. The
coefficient of import is of particular significance, offering strong support for
the import compression hypothesis. The most important policy implication of the
findings is the implementation of an appropriate and optimal approach that can
boost exports and hence increase economic growth substantially. Policymakers
should focus on export diversification strategies and invest more in Sudan’s
ability to provide value-added services in order to meet international export
demand. It is recommended that future research on this topic be based on high
frequency data and larger sample sizes to increase the reliability of the
results. Additional studies are recommended to investigate Sudan’s export
diversification, volatility, and performance, as well as its import contraction
hypothesis.
Author(s) Details:
Mohamed Sharif Bashir,
Imam
Mohammad Ibn Saud Islamic University, Riyadh, Saudi Arabia.
Ahmed
Abdu Allah Ibrahim,
Al
Neelain University, Khartoum, Sudan.
Please see the link here: https://stm.bookpi.org/AOBMER-V8/article/view/13104
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