The Long Run Relationship between Exports and Imports in South Africa: Evidence from Cointegration Analysis
Authors: Sagaren Pillay
This study empirically examines the long run equilibrium relationship between South Africa’s exports and imports using quarterly data from 1985 to 2012. The theoretical framework used for the study is based on Johansen’s Maximum Likelihood cointegration technique which tests for both the existence and number of cointegration vectors that exists. The study finds that both the series are integrated of order one and are cointegrated. A statistically significant cointegrating relationship is found to exist between exports and imports. The study models this unique linear and lagged relationship using a Vector Error Correction Model (VECM). The findings of the study confirm the existence of a long run equilibrium relationship between exports and imports.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1337325Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 2380
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