Manufactured exports, disaggregated imports and economic growth: the case of Kuwait

Abstract This study investigates whether manufactured exports contribute to economic growth and imports can augment the role of in fostering export diversification. In case latter, also examines which categories are most likely facilitate long run. particular, focuses on Kuwait over period 1970–2019 utilizes a Cobb–Douglas production function augmented with primary imports. The long-run relationships between model variables explored using two cointegration tests, namely Johansen test dynamic ordinary least squares. short-run causality is investigated utilizing multivariate Granger approach vector autoregressive model, parameters assessed for stability CUSUM squares recursive residuals plots. To examine causal run, Toda Yamamoto applied. tests show that cointegrated, while shows disaggregated imports, together inputs production, cause short which, turn, leads import growth. expansion both drives diversification, whereas do not These findings very important Kuwait’s policymakers consider their plans implement Vision 2035 as overseas demand oil wanes.