Export-Led and Import-Led Growth Hypotheses: Empirical Evidence from Greece

This chapter examines the impact of exports and imports on economic growth in Greece alongside empirical analysis of the export-led growth hypothesis (ELGH), the import-led growth hypothesis (ILGH), the growth-led export hypothesis (GLEH), and the growth-led import hypothesis (GLIH), both in the short and long run. To analyze these hypotheses, we used Johansen’s approach to examine whether there is a long-run equilibrium relationship between the variables, the vector error correction model (VECM) to discover how variables behave in the long and short run, and the Granger causality test for the direction of the behavior of variables. The results of this study show that there is a long-run relationship between the variables. The results of the controls show evidence to favor the case for export-led growth in the long run and import-led growth in the short run but not in the long run.