IS THE EXPORT-LED GROWTH HYPOTHESIS VALID FOR INDUSTRIALIZED COUNTRIES

This paper tries to establish whether a causal link between exports and productivity exists for four developed market economies based on cointegration and Granger-casuality techniques. These techniques allow serious problems encountered in previous attempts to examine this relationship to be overcome, while recent trade theory suggests that the relationship between trade and productivity is fundamentally ambiguous. The findings of the econometric analysis suggest that an ''outward-looking'' regime favours the productivity performance of developed market economies as well as that of developing countries.