Abstract:
This paper examines the causal relationship between exports and growth in nine provinces of South
Africa for the period 1995-2011, using panel causality analysis, which accounts for cross-section
dependency and heterogeneity across regions. Our empirical results support unidirectional causality
running from economic growth to exports for Mpumalanga only; a bi-directional causality between
exports and economic growth for Gauteng; and no causality in any direction between economic
growth and exports for the rest of provinces. This suggests that export expansion might not be an
efficient strategy to improve provincial economic performance in South Africa as neither exports
nor economic growth is sensitive to each other in almost all provinces.
