An Example of Empirical Literature Review (Term Paper Sample)

Empirical Literature Review
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Conduct an Empirical Literature Review on: Effects of Imports on Economic Growth, Effects of Exports on Economic Growth, and Impacts of Foreign Domestic Investment (FDI) on Economic Growth
a). Effects of Imports on Economic Growth
Bakari and Mabrouki (2017) carried out a research aimed at exploring the bearings of imports and exports in Panama from 1980 to 2015. They employed Johansen’s co-integration analysis of VAR Model to explore how economic growth is influenced by volumes and value of imports and exports in Panama. This was calibrated in conjunction with the Granger-Casualty tests to examine causality. The outcome of the described analysis led to a determination that exports as well as imports bear no significant influence on Panama’s economic growth. On the contrary, there was a strong indication of bidirectional interdependence between economic growth and imports as well as between economic growth and exports. Based on these outcomes, there is proof that growth of the economy in Panama arises from the contribution of exports and imports.
Saaed (2015) conducted an investigation on the effect of exports (IM) and imports (EX) on the growth of Tunisia’s economy. The research focused from the year 1977 to 2012. For the long run, their research employed the Johansen's Cointegration Technique used alongside Granger's Causality test’s cointegration technique. When ADF test and Phillip-Perron (PP) test were chosen to test for stationarity in the analysis of the data. It was found out that there exists a unidirectional causality of imports and growth of the economy. It was concluded that imports and growth of the economy do not have a direct relationship and it cannot, therefore be justified that imports (IM) directly impacts growth of the economy.
Hey (2012), conducted a research to determine the export-led, growth-led, import-led and foreign deficit sustainability quantification in China using review of consecutive historical yearly data from 1978 to 2009. The study forecasting evidence employed the Philips Perron Unit root tests to ascertain the autoregression and integration lag (ARDL) approach. Specifically, the a Philips Perron estimates aimed at determining the long run relationship as well as its direction behind the long and short run causation interrelation presented by the Granger causality test. The study findings revealed that there is a long run relationship between imports and economic growth. Still, the findings dictated the researchers to confirm that the hypothesis that imports-led and growth-led are interlinked in causation. Specifically, the economic growth elasticity to imports is 0. 621 while elasticity of imports under the economic growth reference is 1.392. The data interpretation concluded that imports play a very colossal role in China's economic growth. The findings established that there is a strong bidirectional relationship between imports and economic growth.
Fullerton & Boehmer (2012) conducted a research on the link between imports, exports and growth of the Mexican Economy between the years of 1980 and 2007 using vector error and causality test correlation quantifications. The statistical interpretation of the quality tests depicted that imports play a more vital part in economic advancement than exports in Mexico. Clearly, a long run association between imports and growth of the economy is observed. This study however factored in the interplay between value of exports and productivity of labour, terms of trade and Gross Domestic Output utilising these methodologies. From the results garnered it is evident that imports place a crucial role when it comes to spurring economic growth.
b). Effects of Exports on Economic Growth
Andrews (2015) studied effect of exports, imports and GDP in Liberia. The period focused for the research was from 1970-2011. The aim of this study was to establish the factors that were Granger Cause of economic growth in Liberia. The data was analysed using vector autoregression model (VAR) to establish these relations with respect to Granger Causality. The research discovered that imports Granger influence both Gross Domestic Product and Exports. The study results further confirmed that that there exists a bi-directional causation between import and Gross Domestic Product. The analysis did not give a suggestion that the economy of Liberia is driven by exports only but by a blend of imports and exports which have long-run effect. The research concluded that exports and GDP have bi-directional causation.
Bakari (2017), For this investigation, yearly reports from the Central Bank of Tunisia (BCT) between the years of 1970 and 2016 were used as sources of the required data. This data was then tested using Co-Integration analysis of the error correction model which gave a long-term conclusion. Considering results obtained, it is correct to say that exports from citrus fruits bear no significant effect on the long run growth of the economy. On the contrary, results from empirical analyses have indicated a positive unidirectional causality between exports of citrus fruits and short-term economic development. There is therefore evidence that exports of citrus fruits are not regarded as a basis for Tunisia’s economic growth and so there has been no sound economic masterplan for the sector. It is therefore necessary that reforms are enacted and implemented to create more robust plans to spur investment and trade in the citrus fruits export sector to stimulate expansion of the economy. The study findings confirmed that exports contribute immensely to economic growth of a country.
Masoud and Suleiman (2016) conducted an investigative study between exports, imports and economic expansion in Malaysia by the use of yearly data analysis between the years of 1967 and 2010. The paper utilized the Granger causality tests, VAR alongside cointegration analysis. The actual connection between exports and economic expansion differed from imports to exports. This indicates that the study failed to directly link the country’s export to their spontaneous economic growth. There findings suggested that economic growth within these five countries had resulted to expansion of their export base and not the contrary. Subsequently, the consumer market for goods and services is distorted that leads to poor living standards, increased money laundry, embezzlement of government funds, and slowed growth on SME's. Thus, the imbalances in imports and exports in a given country lead deterioration in economic growth. This was ascertained and confirm through the causality tests interpretation that exports affects economic growth of a nation.