Import, Export and Economic Growth: A GMM Analysis Based on Dynamic Panel Data from Chinese Prefecture City

摘要

This paper employed GMM for the first time to estimate the dynamic relevance between foreign trade and the economic growth based on the panel data of 284 Chinese Prefecture cities from 1994 to 2010. We find that both export and import improve the economic in general and the export-led growth hypothesis holds in China. Especially, the positive impact of import maybe even outnumber export. This finding is important to reconsider the weight of the export and import and correct the development strategy to sustainable development strategy.That would help reduce the pollution from inefficiency production to export and the environmental damage. Furthermore there is no significant evidence of investment and human capital in promoting economic development.