| Summary: | This study investigates the causal relationship among comparative advantage, exports and economic growth by using the time series annual data for the period of 1980-2009 on 13 developing countries. The purpose is to develop an understanding of causal relationship and explore the differences or similarities among different sectors of several developing countries that are in different stages of development and how their comparative advantage influences the exports, which further effect the economic growth of the country. The co-integration and the vector error correction techniques are used to explore the causal relationship among the three variables. The results suggest bi-directional or mutual long run relationship between comparative advantage, exports and economic growth in most of the developing countries. The overall long run results of the study favour the export led growth hypothesis that exports precede the growth in case of all countries except for Malaysia, Pakistan and Sri Lanka. The short run mutual relationship exists mostly among the three variables except for Malaysian exports and growth and its comparative advantage and GDP and for Singapore‟s exports and growth. The short run causality runs from exports to gross domestic product (GDP). So overall, short run results favour export led growth in all cases except for Malaysia, Nepal and Sri Lanka.
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