Which exports contribute more to economic growth in the UAE?

This study examines the causal relationship between non-primary exports and economic growth in the United Arab Emirates (UAE), with a focus on both short and long-run dynamics. While prior research indicates that exports generally promote economic growth, evidence from the GCC region, including the UAE, suggests that this effect may be limited to the short run, particularly for economies reliant on primary goods. Through a collaborative project between the LSE Middle East Centre and the American University of Sharjah, we investigate the specific contributions of three non-primary export sub-categories chemical products, manufactured goods, and machinery and transport equipment, using advanced econometric modelling over the period 1981–2019. Findings reveal that chemical exports drive short-run growth, whereas machinery and transport equipment exports exhibit a bi-directional causal relationship with economic growth in both the short and long run, confirming the presence of circular causation. These results underscore the importance of transitioning from low-tech to skill-intensive exports to sustain long-term economic development in the UAE.