EXPORT-LED GROWTH HYPOTHESIS IN ZIMBABWE: DOES EXPORT COMPOSITION MATTER?

This study examines the validity of the export-led growth hypothesis in the Zimbabwean economy. We use annual time series data for the period 1977 to 2006 in an export augmented aggregate production function framework. Applying the bounds testing (ARDL) approach to cointegration, we investigate whether a long-run relationship exists between exports and non-export GDP. Two models are estimated; the first model is the total exports model while the second model disaggregates exports into primary goods export and manufactured goods exports. Empirical results support the export-led growth hypothesis in Zimbabwe and reveal that a longrun relationship exists between exports and non-export GDP and that the direction of relationship runs from exports to non-export GDP in both the short-run and the long-run. The results also show evidence of productivity-enhancing effects of primary exports while manufactured exports are productivity-limiting in the short-run.