On Exports and Economic Growth: Revisiting Export-Led Growth Hypothesis Including North-South Divide

Objective: The purpose of the present study is to revisit the export-led growth hypothesis in the wake of globalization. This will help in trade policy decisions and make it possible to standpoint whether the export promotion is a good idea to accelerate economic growth. Design: The ELG hypothesis is examined for 107 countries through panel data analysis using cointegration and panel regression tests from 1990 to 2018. The study finds strong support for the long-run relationship between exports and gross domestic product and the export-led growth hypothesis in a two-variable regression framework. Findings: It is evident from the long-run coefficient of dynamic ordinary least squared that a 1.0 percent increase in real exports increases the real gross domestic product by 0.53 percent. The long-run coefficient of real exports for the Global South (0.55) is found higher than that of the Global North (0.51), which indicates that in the wave of globalization, the evidence of export-led growth hypothesis is stronger for comparatively poor Global South than the richer Global North. Practical Implications: The results indicate implications for export promotion policy in the Global South countries to accelerate economic growth and increase real gross domestic product. Originality: The study is the first to explore the ELG hypothesis using a big pool of 107 countries, including the global north-south divide.

Impact of Tourism on Economic Growth of Nepal: Is Tourism-Led Growth Hypothesis Valid for Nepal?

A voluminous study is available on tourism-growth nexus as tourism industry received considerable attention as a potential source of economic growth. This paper empirically examines the impact of tourism on economic growth of Nepal by using time series data of 1976-2020 and applying autoregressive distributed lag (ARDL) approach. Real GDP was used as proxy measure of economic growth, which was the outcome variable whereas the variable of interest was tourism receipts. Foreign aid, total volume of trade and ratio of government consumption expenditure to GDP were taken as control variables. The result of ARDL model shows that tourism has no significant impact on economic growth of Nepal in both short-run and long-run. However, total volume of trade has positive and significant effect on economic growth in short-run whereas foreign aid, total volume of trade and ratio of government consumption expenditure to GDP have positive and significant effect on economic growth in the long-run. In such context of tourism and growth relationship, tourism-led growth hypothesis is rejected for Nepal.

THE TOURISM-LED GROWTH HYPOTHESIS IN TRANSITION ECONOMIES? EMPIRICAL EVIDENCE FROM A PANEL DATA ANALYSIS

Tourism has been considered as a potential factor in development strategy in many developed and developing countries worldwide. Besides, tourism is really a key economic sector in some countries. This study aims to examine the tourism-led growth hypothesis for some transition countries, which includes seven high growth economies Bulgaria, Hungary, Poland, Romania, Russia, Ukraine and Vietnam. The research database is collected by an annual form in the period of 1995-2019. These economies are considered successful transitional cases in the global economy, however, the tourism-led growth hypothesis in these countries has been received only a little evidence from academics in recent years. The Johansen-Fisher test and the OLS estimation are applied in the quantitative process. There are some new findings from the empirical results. First, the Johansen-Fisher test confirms the existence of long-run cointegration relationships between tourism (denoted by the tourism revenue and the tourism arrivals) and economic growth in the panel data sample of countries. Second, the long-run coefficients of the tourism variables are positive and significant that concludes the tourism-led growth hypothesis in these transition countries. The contribution of the study is not only to fill the empirical research gap by the estimated results from a group of transition economies but also to confirms the tourism-led growth platform as an efficient development strategy for other developing countries. Furthermore, our study suggests some policy implications for policymakers to use tourism as a key development sector in these countries in the future.

The Dynamic Impact of Government Expenditure in Education on Economic Growth

The focal aim of this study is to examine the validation of education-led economic growth hypothesis in Malaysia under the recovery period following the 2008 world economic crisis. Specifically, this study implemented the augmented Cobb-Douglas model in order to observe the dynamic relationship between selected variables including, industrial production index, gross fixed capital formation, employment, government spending on education and broad money supply. This study adopted the Vector Error Correction Model (VECM) in analysing the dynamic impact between variables and generally supports the education-led growth hypothesis in the short and long run. Specifically the study corroborates the bidirectional causality between education spending and economic growth, and vice versa, in the short run. The result also reveals that long-run equilibrium relationship exists between government expenditure in education and economic growth in Malaysia during post-crisis recovery regime. The education-led growth hypothesis can thus be inferred for the economy following crisis. The government should thus be advised that increasing education sector spending should increase post-crisis economic growth in both the short and long run. This is further strengthened by Granger causality test result which suggests unidirectional causality that runs from financial variable to economic growth. It is accordingly suggested that financial variable is a determinant of government spending on education in the aftermath of the economic crisis. Additionally, the study also supports the role of capital and employment on economic growth in the long term. By implication, the study suggests that financial planning as related to national education policies must be carefully and meticulously crafted, to ensure future success. This is linked to the investment in human capital which includes education expenditure at different levels that is essentially important to national long-term planning. The specific financial planning for human capital development is therefore very important to ensure the expenditure incurred contributes to sustainable economic development in Malaysia in the long term.

Foreign Direct Investment Led Growth Hypothesis and Economic Development in Nigeria

This study was an inquiry into the nexus of the foreign-direct investment (FDI) led growth hypothesis, and how it translates into the development of the Nigerian economy as of 1970 – 2018. The study utilized secondary data from the ‘World Development Indicators’ which were analysed using the Bounds test for cointegration and the ‘autoregressive distributed lag (ARDL) approach to divulge both the short-term cum the long-term influence of foreign direct investment net inflow on ‘economic development’ of Nigeria. The Bounds test was conducted after the unit root test revealed that the variables were stationary at mixed order of level and first difference. The outcome of the ARDL Bounds test supported confirmation of long-term association among the variables. The ARDL short-run error correction showed that 14.62% of the instability in the model was corrected yearly. In the short-term, it was discovered that FDI wielded a deleterious and substantial weight on ‘economic development of Nigeria. Meanwhile, the long-term estimates indicated that FDI influenced economic development positively, though not in a significant manner. The Granger causality test supported the fact that FDI causes ‘economic development’ in Nigeria. Given this potential of FDI exerting a positive effect on ‘economic development’, the paper recommended that bottlenecks inherent in FDI influxes in the country should be removed so as to reap the fullest benefits of such inflows in Nigeria.

TMK-based cell-surface auxin signalling activates cell-wall acidification

The phytohormone auxin controls many processes in plants, at least in part through its regulation of cell expansion1. The acid growth hypothesis has been proposed to explain auxin-stimulated cell expansion for five decades, but the mechanism that underlies auxin-induced cell-wall acidification is poorly characterized. Auxin induces the phosphorylation and activation of the plasma membrane H+-ATPase that pumps protons into the apoplast2, yet how auxin activates its phosphorylation remains unclear. Here we show that the transmembrane kinase (TMK) auxin-signalling proteins interact with plasma membrane H+-ATPases, inducing their phosphorylation, and thereby promoting cell-wall acidification and hypocotyl cell elongation in Arabidopsis. Auxin induced interactions between TMKs and H+-ATPases in the plasma membrane within seconds, as well as TMK-dependent phosphorylation of the penultimate threonine residue on the H+-ATPases. Our genetic, biochemical and molecular evidence demonstrates that TMKs directly phosphorylate plasma membrane H+-ATPase and are required for auxin-induced H+-ATPase activation, apoplastic acidification and cell expansion. Thus, our findings reveal a crucial connection between auxin and plasma membrane H+-ATPase activation in regulating apoplastic pH changes and cell expansion through TMK-based cell surface auxin signalling.

Publication bias and the tourism-led growth hypothesis

This study attempts to solve the publication bias suggested by recent review articles in the tourism-growth literature. Publication bias is the tendency to report favourable and significant results. Method and data triangulation, and the Solow-Swan model are applied. A sample from 1995 to 2018 is considered with Tonga as a case study. The approach consists of multiple methods, data frequencies, exchange rates, structural breaks, and an overall tourism index developed using principal component analysis (PCA). Consistent results across these dimensions are obtained with the PCA models. Tourism has small, positive, and statistically significant economic growth effects. Theoretically consistent values of the capital share and exchange rates are obtained. The results indicate the importance of multiple methods and the overall tourism index in assessing the tourism-growth relationship and minimising publication biases. The practical implication is the provision of robust elasticity estimates and better economic policies.

DOES INTERNATIONAL TOURISM PROMOTE ECONOMIC GROWTH? SOME EVIDENCE FROM INDONESIA

Realizing an increasing contribution of the tourism sector to global economies, this study intends to enrich the existing tourism literature by empirically exploring the short- and long-run dynamic causalities between tourism and economic growth in Indonesia over the period 1995 to 2017. For these purposes, cointegration, Fully Modified Least Squares (FMOLS), and Granger causality techniques are adopted. The study found a cointegration between tourism and economic growth, indicating the existence of a long-run relationship between the tourism sector and economic growth. In the long-run, tourism has contributed to the promotion of economic growth. Finally, both in the short- and long-run, the study found a unidirectional causal relationship running from tourism to economic growth, confirming the tourism-led growth hypothesis. To enhance Indonesia's economic growth, the tourism sector should be further promoted by making it more attractive, supported by advanced IT facilities, warm hospitality, and diversified tourism objects.