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Nexus between Export ‎Diversification and Economic ‎‎Growth: A Case Study of ‎Afghanistan

Mr. Mohammad Yama and Dr. Nassir Ul Haq Wani

Volume 4 Issue 1 | Mar 2021

DOI: ‎10.31841/KJEMS.2021.8

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Economic growth and acceleration of international trade has been a major ‎concern for ‎researchers all over the world. In this regard, this paper aims to ‎investigate the ‎relationship between export diversification and economic growth ‎in Afghanistan. ‎Economic growth in the long term is critical for Afghanistan to ‎achieve political ‎stability, self-reliance and sustainable economic development that ‎have been, all ‎together, committed to be implemented as part of the Sustainable ‎Development Goals. ‎This study used annual time series data for the period ‎spanning from 2008-2018 to ‎analyze the relationship between export ‎diversification and economic growth in ‎Afghanistan. In order to analyze the effects ‎of export diversification on economic ‎growth, VAR model has been applied. The ‎estimated results denote that there is ‎positive relationship between export ‎diversification and economic growth in ‎Afghanistan. Other explanatory variables ‎like trade openness, gross domestic fixed ‎capital formation is in favor of economic ‎growth. It is recommended that measures ‎should be taken towards the ‎identification of new export markets by working closely ‎with its regional ‎counterparts to streamline the administrative requirements in the ‎region to ‎increase market access, put greater emphasis on the production of higher-‎value-‎added products and invest in human capital through education and training of ‎‎skilled labor for high-value services. ‎

Keywords: Afghanistan, Export Diversification, Economic Growth, Trade