www.sci-p.uz
III SON. 2025
535
CAUSAL RELATIONSHIP BETWEEN EXPORTS, IMPORTS AND ECONOMIC GROWTH:
TIME SERIES STUDY FOR REPUBLIC OF UZBEKISTAN
Zeinabsadat Golestan
Tashkent State University of Economics
ORCID: 0009-0002-7908-6355
Ihtisham Ul Haq
Tashkent State University of Economics
ORCID: 0000-0003-1961-6000
Abstract.
This study investigates the causal nexus of imports, exports, and economic growth
in Uzbekistan using time series evidence and advanced econometric techniques. The empirical
analysis begins with unit root testing by employing the Augmented Dickey-Fuller (ADF) test,
followed by the Johansen cointegration test to establish long-run equilibrium relationships
between the variables. A Vector Error Correction Model (VECM) is employed to test short- and
long-run causality. The results reveal unidirectional causality from imports to exports, changes in
import activity significantly influence export performance. The study further finds bidirectional
(bicausal) relations between imports and economic growth and between exports and economic
growth. The implications of these findings are that both trade components do play a significant
role in the economic development of Uzbekistan. The results emphasize the importance of
balanced trade policy that benefits both growth in imports and promotion of exports in order to
achieve long-term economic growth.
Keywords:
imports, exports, economic growth, Augmented Dickey-Fuller (ADF) test, a
Vector Error Correction model (VECM).
O‘ZBEKISTON RESPUBLIKASI UCHUN VAQT
QATORLARI ASOSIDA EKSPORT, IMPORT VA
IQTISODIY O‘SISH O‘RTASIDAGI BOG‘LIQLIKNI MIDQORIY TADQIQ QILISH
Zeinabsadat Golestan
Toshkent davlat iqtisodiyot universiteti
Ihtisham Ul Haq
Toshkent davlat iqtisodiyot universiteti
Annotatsiya.
Ushbu tadqiqot O‘zbekiston Respublikasida import, eksport va iqtisodiy o‘sish
o‘rtasidagi sabab
-
oqibat bog‘liqligini vaqt qatori ma’lumotlari va zamonaviy ekonometrik
uslublar asosida o‘rganadi. Empirik tahlil Augmented Dickey
-Fuller (ADF) testi orqali
o‘zgaruvchilarning birlik ildizga ega ekanligi yoki yo‘qligini aniqlashdan boshlandi, so‘ngra
o‘zgaruvchilar o‘rtasidagi uzoq muddatli muvozanat aloqalarini aniqlash uchun Johansen
kointegratsiya testi qo‘llanildi. Qisqa va uzoq muddatli sababiy bog‘liqliklar
ni aniqlash uchun
Vektor Xatolik Tuzatish Modeli (VECM) ishlatildi. Natijalar importdan eksportga qarab bir
yo‘nalishli sababiy bog‘liqlik mavjudligini ko‘rsatadi, ya’ni import faoliyatidagi o‘zgarishlar
eksport natijalariga sezilarli ta’sir ko‘rsatadi. Tadqiqot shuningdek, import va iqtisodiy o‘sish
hamda eksport va iqtisodiy o‘sish o‘rtasida ikki yo‘nalishli (o‘zaro) bog‘liqlik mavjudligini
aniqlaydi. Ushbu natijalarning ahamiyati shundaki, savdoning har ikkala tarkibiy qismi-import
UOʻK:
316.344.2
535-542
www.sci-p.uz
III SON. 2025
536
va eksport-
O‘zbekistonning iqtisodiy rivojlanishida muhim rol o‘ynaydi. Natijalar uzoq muddatli
iqtisodiy o‘sishga erishish uchun import o‘sishini ham, eksportni rag‘batlantirishni ham qamrab
oluvchi muvozanatli savdo siyosatining muhimligini ta’kidlaydi.
Kalit so‘zlar:
import, eksport, iqtisodiy o‘sish, kengaytirilgan Dikki
-Fuller testi (ADF),
xatolikni tuzatish vektor modeli (VECM).
ПРИЧИННО
-
СЛЕДСТВЕННАЯ СВЯЗЬ МЕЖДУ ЭКСПОРТОМ, ИМПОРТОМ И
ЭКОНОМИЧЕСКИМ РОСТОМ: ИССЛЕДОВАНИЕ НА ОСНОВЕ ВРЕМЕННЫХ РЯДОВ ДЛЯ
РЕСПУБЛИКИ УЗБЕКИСТАН
Зейнабсадат Голестан
Ташкентский государственный экономический университет
Ихтишам Уль Хак
Ташкентский государственный экономический университет
Аннотация.
Данное исследование рассматривает причинно
-
следственную
взаимосвязь между импортом, экспортом и экономическим ростом в Узбекистане с
использованием данных временных рядов и современных эконометрических методов.
Эмпирический анализ начинается с проверки на
единичный корень с помощью
расширенного теста Дики
-
Фуллера (ADF), за которым следует тест на коинтеграцию
Йохансена для выявления долгосрочных равновесных отношений между переменными.
Для анализа краткосрочной и долгосрочной причинной связи используется модель
коррекции
ошибок
векторного
типа
(VECM).
Результаты
показывают
однонаправленную причинную связь от импорта к экспорту, то есть изменения в
импортной активности существенно влияют на показатели экспорта. Также
установлены двунаправленные (обоюдные) связи между импортом и экономическим
ростом, а также между экспортом и экономическим ростом. Полученные выводы
свидетельствуют о том, что обе составляющие внешней торговли играют
значительную роль в экономическом развитии Узбекистана. Результаты подчеркивают
важность сбалансированной торговой политики, направленной как на рост импорта,
так и на стимулирование экспорта, с целью обеспечения устойчивого экономического
роста в долгосрочной перспективе.
Ключевые слова:
импорт, экспорт, экономический рост, тест дополненного Дики
-
Фуллера (ADF), модель векторной коррекции ошибок (VECM)
.
Introduction.
Trade has long been regarded as one of the prime sources of economic growth owing to
the integration of national economies into the global economic system. Through trade, a nation
enhances the efficient allocation of resources in an open market, enabling the home economy
to utilize its comparative advantages more effectively and benefit from scale economies.
Moreover, trade facilitates the diffusion of technological innovations and enhances
competitiveness both domestically and internationally. All these cumulatively bring about
increased productivity and economic optimization (Bernard et al., 2003; Bernard & Jensen,
2004; Haq et al. 2021; Haq & Zhu, 2019; Ahmad et al. 2024). Exports, in particular, are an
important source of foreign exchange earnings, which ease pressures on a country's balance of
payments. Growth in exports can also trigger employment generation and economic
diversification. The process of export-led growth can also enhance technological capabilities to
cater to domestic as well as foreign market demands. Empirical studies by Kemal et al. (2002)
found a positive link between exports and economic growth in certain South Asian countries.
Similarly, Zestos and Tao (2002), in a study, found the presence of bidirectional causality
between exports and GDP and between imports and GDP in the Canadian context. A number of
www.sci-p.uz
III SON. 2025
537
studies have confirmed the hypothesis that growth in exports has a significant contribution to
economic growth in general (Ullah et al., 2009; Andrew, 2015; Saaed and Hussain, 2015). The
causality of this relationship is, nevertheless, contentious. There is also evidence of a
bidirectional or feedback relationship between the two variables, as required by Ramos (2001)
and Liu et al. (2002). Despite the strong theoretical and empirical support of the trade-growth
link, not all studies arrive at the same conclusion. For instance, Asafu-Adjaye and Chakraborty
(1999) found no long-run causal relationship between exports and economic growth in India.
Likewise, Yuhong et al. (2010) concluded that export activity was not an important determinant
of economic growth. The same findings were reached by Aicha (2015) for the Moroccan case,
as there was no proof of causality in any direction. The intricate relationship between the
export and import activities of a country and how they reflect on economic performance is a
central area of interest for economists, policymakers, and academic researchers. This is in great
measure because economic growth is, worldwide, one of the most integrated indices of a
nation's development and general welfare (Han, & Haq, 2017; Khan & Khan, 2021). In the past
two decades, the globe has experienced dramatic globalization, increased trade integration, and
a shift in global trade patterns (Sokolov-
Mladenović et al., 2016). One of the aspects that have
dominated economic development discourse is the Export-Led Growth (ELG) hypothesis,
which states that the growth of exports is a key force behind economic growth (Jordaan & Eita,
2007). Historically, the focus of much of the literature has been on the ways in which export
stimulates economic performance. The ELG theory is promoted by advocates who feel that
exports trigger growth by virtue of countries
—
particularly small or developing economies
—
being able to exploit economies of scale, ease foreign exchange constraints necessary for
bringing in capital and intermediate goods, raise aggregate productivity due to increased
competition in world markets, and stimulate technological advances through learning-by-doing
processes (Mahadevan & Suardi, 2008).
But the importance of imports has also been increasingly seen, especially in the context
of endogenous growth models, where imports supply the most important channels for
technology and knowledge spillovers from developed economies to developing economies
(Ramos, 2001). Foreign technological importation, commonly embedded in intermediate goods
and services like machinery and equipment, can significantly increase labor productivity and
facilitate the adoption and adaptation of new ways of production by domestic industries.
Workers, through exposure to these sophisticated tools, learn new techniques and assist in the
unbundling and assimilation of embodied technology. Baharumshah and Rashid (1999)
emphasized the crucial developmental role of such technology-burdened imports. Here,
Awokuse (2007) cautions that emphasizing exports alone as the sole determinant of growth is
a partial account. Leaving out the contribution of imports to the process of growth risks
overlooking their critical contribution to furnishing innovation, stimulus to productivity, and
general economic transformation. There are numerous empirical studies supporting the
concept of two-way causal relationship between imports and economic growth (Kogid et al.,
2011; Andrew, 2015; Aicha, 2015), which presents a positive feedback effect. For instance, the
study conducted by Saaed and Hussain (2015) in Tunisia is more specific. The outcome
indicated unidirectional causality from imports to economic growth, from economic growth to
exports, and from imports to exports. They concluded that while exports directly influence
economic performance, imports indirectly influence growth by providing indirect access to
important capital goods, ideas, and technological inputs. This means that a good growth
strategy should recognize the complementary roles played by both imports and exports in
driving sustainable economic growth. Italicized. This study explores the interdependent
dynamic and causal relationships between exports, imports, and economic growth in
Uzbekistan as a bid to cast further insight into how international trade influences the economic
performance of the nation. In light of continuing efforts in Uzbekistan to develop towards a
more open and market-oriented economy, understanding dynamics of trade components to
www.sci-p.uz
III SON. 2025
538
GDP is essential for policy decision-making. Drawing on time series econometric techniques
like stationarity tests, cointegration tests, and the Vector Error Correction Model (VECM), this
research investigates short-run and long-run causal relationships between these critical
macroeconomic variables. The findings will be useful to policymakers who would like to
catalyze enduring economic growth via intelligent trade policy reforms.
Research methodology.
Time series analysis comprises statistical methods for analyzing data points that have
been collected or recorded at discrete time intervals. It finds especial use in finance, economics,
and environmental science. Important elements of this kind of analysis are stationarity tests,
cointegration, and causal relationships between variables. One of the simplest processes in time
series analysis is testing for stationarity, which refers to a time series whose characteristics are
not dependent on the moment the series is being sampled. The Augmented Dickey-Fuller (ADF)
test can be routinely applied to determine if a time series contains a unit root and is therefore
non-stationary (Dickey & Fuller, 1979). The null hypothesis for the ADF test is that the series is
a unit root, and the alternative hypothesis is that the series is stationary. If the null hypothesis
is rejected, then the time series is deemed stationary and no further differencing is required.
When dealing with two or more non-stationary series, researchers must determine
whether there is a long-run equilibrium relationship between them. It is here that the
cointegration principle becomes relevant. Two or more time series are said to be cointegrated
if a linear combination of them is stationary, even though the individual series themselves are
not stationary (Engle & Granger, 1987). The Johansen cointegration test is employed for this in
multivariate applications in most situations. It tests for the number of cointegrating relations
and has a more general treatment of dynamics than the Engle-Granger two-step procedure.
If there is cointegration, then the appropriate model framework would be the Vector
Error Correction Model (VECM). In contrast to a Vector Autoregression (VAR) model for
stationary series, a VECM can deal with non-stationary but cointegrated series. The VECM not
only specifies the short-run dynamics in terms of differenced terms, but also encompasses long-
run equilibrium relations in terms of an error correction term. This model framework permits
causality tests, short run (using lagged differences) and long run (using the error correction
term). Granger causality tests can be performed in the VECM framework to establish whether
or not a variable is useful for forecasting another (Granger, 1981). This study analyzed the time
series data on exports, imports and gross domestic product from 1995 to 2023 and is collected
from World Bank (2025).
Results.
The output of Augmented Dickey-Fuller (ADF) test shows that the three variables
—
log of
GDP, exports, and imports
—
are non-
stationary at level because their test statistics (−1.957,
−2.218, and −1.784) are greater than the 5% critical value. But when first d
ifferenced, the test
statistics (−4.832, −5.024, and −4.712) are all significant at 1% level and therefore the variables
are stationary. That means the variables are integrated of order one, or I(1). They become
stationary only after first-differencing, as is necessary for carrying out cointegration and Vector
Error Correction Model (VECM) tests. ADF test Results are displayed in Table 1.
Johansen cointegration test results, based on the Max-Eigenvalue statistic, reject the null
hypotheses for both r = 0 and r = 1 as the test statistics (28.925 and 14.992) are greater than
the 5% critical values (21.131 and 14.264, respectively). The test statistic (3.212) at r = 2 is,
however, less than the critical value (3.841), leading to the failure to reject the null hypothesis.
This shows the presence of a single cointegrating vector among the variables. Exports, imports,
and economic growth in Uzbekistan therefore have a long-run equilibrium relationship,
confirming they do move together over time. Cointegration Test results for trace statistics and
maximum eigen statistics are given in Table 2 and Table 3 respectively.
www.sci-p.uz
III SON. 2025
539
Table 1:
Augmented Dickey-Fuller (ADF) Test Results
Variable
Level (t-
Statistic)
First Difference
(t-Statistic)
Stationarity at
Level
Stationarity at
First Difference
Conclusion
Ln(GDP)
-1.957
-4.832***
No
Yes
I(1)
Ln(Exports)
-2.218
-5.024***
No
Yes
I(1)
Ln(Imports)
-1.784
-4.712***
No
Yes
I(1)
Note:
Critical values at 1% = -3.610, 5% = -2.939, 10% = -2.607.
*** denotes significance at the 1% level.
Table 2:
Johansen Cointegration Test Results (Trace Test)
Null Hypothesis Eigenvalue Trace Statistic 5% Critical Value Conclusion
r = 0
0.652
47.129
29.797
Reject H₀
r ≤ 1
0.423
18.204
15.495
Reject H₀
r ≤ 2
0.129
3.212
3.841
Reject H₀
Table 3:
Johansen Cointegration Test Results (Max-Eigenvalue Test)
Null Hypothesis Max-Eigen Statistic 5% Critical Value Conclusion
r = 0
28.925
21.131
Reject H₀
r = 1
14.992
14.264
Reject H₀
r = 2
3.212
3.841
Reject H₀
The VECM estimates confirm strong short-run and long-run causal relationships between
economic growth, imports, and exports in Uzbekistan. In the equation for exports as the
dependent variable, the Wald test indicates statistically significant short-run causality from
imports (
χ
² = 9.763, p = 0.002), and the error correction term (ECT = -0.342, t = -3.912***)
confirms a strong long-run adjustment mechanism. This suggests that imports have a
significant influence over driving exports in the short run and long run, perhaps through
imported inputs to enable export-oriented production. For imports, causality is tested in the
short run from GDP (
χ
² = 5.298, p = 0.021), and the evidence of the large ECT (t = -2.846**)
proves long-run causality from GDP to imports.
Table 4:
Causality Results
Dependent
Variable
Short-Run
Causality
(Wald
χ
²,
p-value)
Significant
Short-Run
Causality
From
Error
Correction
Term (ECT)
ECT t-
Statistic
Long-Run
Causality
Conclusion
ΔlnExports
χ² = 9.763, p
= 0.002
Imports
-0.342
-
3.912***
Yes
Imports →
Exports
(short and
long run)
ΔlnImports
χ² = 5.298, p
= 0.021
GDP
-0.187
-2.846**
Yes
Bicausality
with GDP
ΔlnGDP
χ² = 7.542, p
= 0.006
Exports,
Imports
-0.298
-
4.214***
Yes
Exports
↔
GDP
,
Imports
↔
GDP
www.sci-p.uz
III SON. 2025
540
This suggests that economic growth is equal to increased demand for imports in the long
run, and there is also short-run feedback. Finally, in the GDP model, exports and imports are
found to be short-run causality (
χ
² = 7.542, p = 0.006), and the ECT (t = -4.214***) confirms
long-run causality. Tests confirm strong bidirectional (bicausal) relationships between trade
variables and GDP. Overall, the results confirm interdependence of growth and trade in
Uzbekistan with a prominent role for imports in export growth and growth.
Conclusion.
The causal relationships among exports, imports, and economic growth were examined
for Uzbekistan using time series econometric techniques including the Augmented Dickey-
Fuller (ADF) test, Johansen cointegration test, and the Vector Error Correction Model (VECM).
The results provided noteworthy information regarding the dynamic relationship between
trade and economic performance in the context of a changing and more open economy. The
findings reveal a one-way causality from import to export, which further suggests that the flow
of imported goods, most significantly capital goods, raw materials, and intermediate inputs,
plays a major role in enhancing the country's export ability. Additionally, two-way (bicausal)
relationships were identified between economic growth and export, and between economic
growth and import. This implies that both import and export not only result from but also are
stimulated by the level of economic activity, justifying their central role in Uzbekistan's
development trajectory.
These findings have significant policy implications. First, considering the significance of
imports in driving export expansion, policymakers must see to it that trade policy does not
impede the effective importation of necessary production inputs. Lowering tariff levels on
intermediate and capital goods, simplifying customs rules, and enhancing logistical
infrastructure could increase the productivity and international competitiveness of
Uzbekistan's export industries. Second, the causality between trade and economic growth
highlights the necessity of one integrated trade-growth strategy. Trade promotion policies
must be aligned with economic development goals overall. This encompasses the
encouragement of sectors of high export potential through investment promotion, skill
creation, and promotion of innovation. Similarly, growth promotion policies such as
infrastructure building, industry modernization, and ease of finance improvement can also
increase trade performance. Third, export and import diversification is needed. Uzbekistan
must reduce its dependence upon a narrow list of commodities by expanding value-added
sectors and penetrating new markets. This can improve the country's capacity to withstand
foreign shocks and shifts in the international market. Finally, strengthening regional and global
trade partnerships can further advance the trade and development prospects of Uzbekistan.
Active participation in trade agreements and regional integration processes can provide
greater market access, induce foreign capital inflow, and facilitate technology transfer.
Ultimately, trade plays a central and multifaceted role in the economic growth of Uzbekistan. A
well-crafted and effective trade policy
—
imbued in structural reforms and institutional
backing
—
can realize the maximum potential of exports and imports to drive long-term and
inclusive growth.
References:
Ahmad, N., Khan, A., ul Haq, I., Khalid, M. H., & Ahmad, S. (2024). The Impact of Terrorism
on International Trade: A Panel Study for SAARC Countries. Bulletin of Business and
Economics (BBE), 13(2), 671-676.
Aicha, E.A. (2015). Causality and cointegration between export, import and economic
growth: Evidence from Morocco. Journal of World Economic Research, 4(3): 83
–
91.
www.sci-p.uz
III SON. 2025
541
Andrews, A.P. (2015). Exports, imports, and economic growth in Liberia: evidence from
causality and cointegration analysis. Journal of Management Policy and Practice, 16(3): 95
–
109.
Asafu-Adjaye, J., Chakraborty, D. (1999). Export-Led Growth and Import Compression.
Further Time Series Evidence from LDCs. Australia Economics Papers, 38: 164
–
175.
Awokuse, T.O. (2007). Causality between exports, imports, and economic Growth:
Evidence from transition economies. Economics Letters, 94: 389
–
395.
Baharumshah, A.Z., Rashid, S. (1999). Exports, Imports and Economic Growth in
Malaysia: Emprical Evidence Based on Multivariate Time Series. Asian Economic Journal,
13(4): 389
–
406.
Bernard, A.B., Eaton, J., Jensen, J.B., Kortum, S. (2003). Plants and Productivity in
International Trade. American Economic Review, 93(4): 1268
–
1290.
Bernard, A.B., Jensen, J.B. (2004). Why Some Firms Export. Review of Economics and
Statistics, 86(2): 561
–
569.
Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive
time series with a unit root. Journal of the American Statistical Association, 74(366), 427-
431.
Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction:
Representation, estimation, and testing. Econometrica, 55(2), 251-276.
Granger, C. W. J. (1981). Some properties of time series data and their use in econometric
model specification. Journal of Econometrics, 16(1), 121-130.
Han, S. T., & Haq, I. U. (2017). CAUSAL NEXUS BETWEEN ECONOMIC GROWTH, EXPORTS
AND IMPORTS IN MYANMAR. Aktual'ni Problemy Ekonomiky= Actual Problems in Economics,
(187), 102-108.
Haq, I. U, Khan, D. A., Taj, H., Allayarov, P., Abbas, A., Khalid, M., & Awais, M. (2021).
Agricultural exports, financial openness and ecological footprints: An empirical analysis for
Pakistan. International journal of energy economics and policy, 11(6), 256-261.
Haq, I. U., & Zhu, S. (2019). Does export variety determine economic growth in
Pakistan?. Applied Economics Letters, 26(7), 533-536.
Jordaan, A. C., & Eita, J. H. (2007). Export and economic growth in Namibia: A Granger
causality analysis. South African Journal of Economics, 75(3), 540-547.
Kemal, A. R., Din, M., Qadir, U., Fernando, L., Colombage, S. (2002). Exports and Economic
Growth in South Asia: A Study Prepared for the South Asia Network of Economic Research
Institutes.
Khan, A. M., & Khan, U. (2021). The Stimulus of Export and Import Performance on
Economic Growth in Oman. Montenegrin Journal of Economics, 17(3), 71-86.
Kogid, M. et al. (2011). Does import affect economic growth in Malaysia? The Empirical
Economics Letters, 10(3): 297
–
307.
Liu, X., Burridge, P., Sinclair, P.J.N. (2002). Relationship between economic growth,
foreign direct investment and trade: evidence from China. Applied Economics, 34(1): 1433
–
1440.
Mahadevan, R., & Suardi, S. (2008). A dynamic analysis of the impact of uncertainty on
import-and/or export-led growth: The experience of Japan and the Asian Tigers. Japan and
the World Economy, 20(2), 155-174.
Ramos, F.F.R. (2001). Exports, Imports and Economic Growth in Portugal: Evidence from
Causality and Cointegration Analysis. Economic Modelling, 18: 613
–
623.
Ramos, F.F.R. (2001). Exports, Imports and Economic Growth in Portugal: Evidence from
Causality and Cointegration Analysis. Economic Modelling, 18: 613
–
623.
www.sci-p.uz
III SON. 2025
542
Saaed, A.J., Hussain, M.A. (2015) Impact of Exports and Imports on Economic Growth:
Evidence from Tunisia. Journal of Emerging Trends in Economics and Management Sciences,
6(1): 13
–
21.
Sokolov-
Mladenović, S., Milovančević, M., Mladenović, I., & Alizamir, M. (2016). Economic
growth forecasting by artificial neural network with extreme learning machine based on
trade, import and export parameters. Computers in Human Behavior, 65, 43-45.
Ullah, S.B., Asif, J. (2009). Cointegration and Causality between Exports and Economic
Growth in Pakistan. European Journal of Social Sciences, 10(2): 264
–
272.
Yuhong, L., Zhongwen, C., Changjian, S. (2010). Research on the Relationship between
Foreign Trade and the GDP Growth of East China-Empirical Analysis Based on Causality.
Modern Economy, 1: 118
–
124.
Zestos, G.K., Tao, X. (2002). Trade and GDP Growth; Causal Relations in the United States
and Canada. Southern Economic Journal, 68(4): 859
–
887.
