Export Performance and Economic Development: An Empirical Analysis

This paper challenges the results of the empirical literature in support of the neoclassical theory of export-led growth and provides a theoretical and empirical alternative. Contrary to the neoclassical theory, we argue that both exports and economic growth are preceded by a long and complex process of structural change and economic development. A cross-section regression analysis is applied to test the neoclassical hypothesis that exports lead to superior economic performance (higher growth of output), and our alternative thesis. The regression results strongly confirm our alternative formulation of exports and economic growth while failing to support the neoclassical thesis.