The export-economic growth relationship has been dealt with in several empirical studies concerning cross-section and time series data. The 1970’s have witnessed an emerging consensus in favor of export promotion. Analysis in depth of individual country experience has provided extensive support for export promotion as an effective development strategy. However, such an advocacy for export oriented policies has not been immune from criticism. Recently it has been argued that there are reasons for export pessimism. The slowing down of economic activities in the industrialized countries implies that the trade engine is running out of fuel. New trade theory has also contributed to the theoretical relationship between exports and growth regarding effects on technical efficiency. In models of imperfect competition and increasing returns to scale, this outcome is ambiguous. The purpose of this paper has been to examine the relationship between exports performance and economic growth in Taiwan using time series data for the period 1970-97. Unlike other studies on this topic the present paper has examined the relationship in a simultaneous equation framework. Following Khan and Saqib (1993) we specify an export augmented Cobb-Douglas production function, export demand and export supply functions simultaneously. The estimation techniques are ordinary least squares (OLS), two-stage least squares methods (2SLS) and three-stage least squares methods (3SLS). Similar to previous studies, this paper finds that the growth rate of exports and GDP growth rate are significantly and positively correlated. It also shows that a strong association between growth rate of total factor productivities and GDP growth rate. The foreign income elasticity of demand for exports is found to be much higher compared with the domestic income elasticity of supply for exports. This finding indicates that Taiwan’s exports are more dependent on world rather than on domestic economic activity.