The relationship between exports and economic growth in Kenya

Abstract

This paper evaluates the existence of a relationship between the exports and economic growth in Kenya. The study aims to improve and develop the policy in this area. The main variables this study include GOP and exports. Univariate and multivariate time series were used to examine the relationship. The univariate time series helped to evaluate stationarity of the variables. The results showed that both exports and GOP were non-stationary. The multivariate time series examined the long run and short run relationships. The evaluation of a long run and short run equilibrium relationship showed that there is a long run equilibrium relationship between exports and GOP. The mediating variable openness portrayed that there is an existence of a short run equilibrium relationship. It was worth note that there was unidirectional causality between exports and economic growth, with the exports Granger Causing GOP.