Does Exports Lead Growth On Colon Free Trade Zone In Panama ?

We investigates the relationship between export and growth for Colon Free Trade Zone in Panama based on Henriques and Sadorsky model(1996) with a modified variable, using the data between 1984 and 2014. Causality is examined between the nominal Colon Free Trade Zone GDP and Colon Free Trade Zone exports in order to be able to test for Granger causality test(1969). Beginning from the fact that Colon Free Trade Zone that is a smaller economy compared with a country, evidence was found that Exports cause growth on GDP, but also GDP cause Exports. It can be says that export led growth theory for a Colon Free Trade Zone also applies. In addition, evidence was found that a 1 percent increase in labor force increases GDP by about 1.25 percent, and a 1 percent increase in exports increases GDP by about 0.484 percent. It does mean that labor force have more impact on Gdp than exports. It means that labor force is the most important factor for growth on GDP.