Exports, export composition and growth: Cointegration and causality evidence for Malaysia

This paper comprehensively tests the export-led growth (ELG) hypothesis for Malaysia for the period 1955-90, using cointegration and causality testing based on Hsiao's synthesis of the Granger test and Akaike's minimum final prediction error criterion. The results provide support for the ELG hypothesis; aggregate exports Granger-cause real GDP and non-export GDP. This relationship is found to be driven by manufactured exports rather than by traditional exports.