The Effect of Export Diversification on Economic Growth: The Case of the BRICS-T

Economic Growth And Export Diversification

Economic growth refers to the increase in the capacity of goods and services produced in an economy over time. In order to mention on economic growth, long-term and continuity must be present. In this context, economic growth refers to the increase in real product per capita in certain periods. That is to say, economic growth is not a static phenomenon that can be measured in the short term, but a dynamic phenomenon in the long term (Taban, 2008).

The economic growth process is a dynamic process that involves many factors. The export-based growth hypothesis is a common view among economists, where growth is one of the main determinants. The growth policy led by exports is based on David Ricardo, which is the basis of the opinion that it has a positive effect on industrialization and development. If the foreign currency required for the growth of the economy in a country cannot be provided and as a result of this situation, exposure to negative consequences in the balance of payments reveals that countries should implement an export-based economic growth policy. It is observed that the countries implementing an external trade policy, especially countries with successful export rates provided more national income growth. So according to these views, the increasing total exports is one of the most important ways to increase the economic growth rate. In order to increase total exports, the production of goods and services in the domestic market needs to be increased, assuming that this increases growth (Taş, 2011: 21).