Exports and productivity in a small open economy : a casual analysis of aggregate Norwegian data

The direct link from growth in export to growth in productivity-the export-led growth hypothesis-is analyzed using aggregated Norwegian quarterly time series data from 1968 to 1992. By applying techniques of multivariate cointegration, a statistical congruent vector autoregression (VAR) model serves as a general point of departure for structural testing and identification of casual links. The results show that labor productivity can be regarded as "super exogenous" with respect to the parameters in a simulaneous system of export price and export volume. We can thus not reject the hypothesis of "productivity-led" growth, as predicted by e.g. the Richardian model of international trade or some of the models within the "new" trade theory.