Export-led Growth Revisited in Emerging Economies

Abstract

Today the world economic power is shifting from the West to the East. Some emerging economies are pulling the economic activities in the world more than ever. These countries are sometimes referred as E7, or 7 emerging economies. They are Brazil, China, India, Indonesia, Mexico, The Russian Federation and Turkey in alphabetical order. This paper analyzes the sources of the economic growth in these countries. In the model the exogeneous factors relating to economic growth are selected as exports and FDI. The endogeneous factors would be reflected in the employment rate. It is found out that most of these countries are growing by exporting. Therefore, it is concluded that the export-led growth paradigm is a viable economic growth model even today. The correlation between economic growth and FDI gives unexpected results. In all emerging economies, economic growth and FDI are negatively correlating, except in Russian Federation and in Turkey there is no correlation between the two variables. In China, economic growth correlates negatively with unemployment suggesting that endogeneous factors play an important role in Chinese economic growth.