EMPIRICAL ANALYSIS OF INDIA’S FOREIGN TRADE AND ECONOMIC GROWTH
DOI:
https://doi.org/10.29121/granthaalayah.v8.i10.2020.1805Keywords:
Imports, Exports, Cointegration, Stationarity, Relationship, Granger CausalityAbstract [English]
The present study is an attempt to examine long run relationship among India’s GDP, Exports and Imports for which yearly time series data from 1995 to 2018 has been collected. Data for India’s GDP has been collected from RBI website and India’s export and import data has been collected form Ministry of Commerce and Industry website. The Augmented Dickey-Fuller unit root test for stationarity found that studied variables become stationary at first order of difference. While, Johnson cointegration test revealed long run cointegration between India’s GDP, exports and imports. The results of VECM Granger causality test exhibited bi-directional relationship between India’s GDP and India’s exports, whereas uni-directional relation has been found between India’s GDP and India’s imports. These results have significant implication for India’s export import policy and to achieve a target of $5 trillion economy till 2024-2025.
Downloads
References
Abbas, S. (2012). Causality between exports and economic growth: Investigating suitable trade policy for Pakistan. Eurasian Journal of Business and Economics,5 (10), 91-98.
Çevik, E. I., Atukeren, E., & Korkmaz, T. (2019). Trade openness and economic growth in Turkey: A rolling frequency domain analysis. Economies, MDPI, Open Access Journal, 7(2), 1-16. DOI: https://doi.org/10.3390/economies7020041
Chang, T., Simo-Kengne, B.D. & Gupta, R. (2014). The causal relationship between imports and economic growth in the nine provinces of South Africa: Evidence from panel granger causality tests. Journal of Economic Cooperation and Development. 35 (2), 71-90.
Chiappini, R. (2011). FDI and trade: A Granger causality analysis in a heterogeneous panel. Economics Bulletin, Economics Bulletin,31 (4), 2975-2985.
Dritsakis, N. (2007). Exports and economic growth: An empirical investigation of E. U, U. S. A and Japan using causality tests. Retrieved online https://pdfs.semanticscholar.org/700f/cfca5a86f8e73a1cb57f579c6360c63481b0.pdf
Eusuf, M. A. & Mansur, A. (2007). Causality between Export and Growth: Evidence from South Asian Countries.The Jahangir Nagar Economic Review, 19(1),73-86.
Gries, T. & Redlin, M. (2012). Trade openness and economic growth: A panel causality analysis. Working Papers CIE 52, Paderborn University, CIE Center for International Economics. Retrieved online http://groups.uni-paderborn.de/fiwi/RePEc/Working%20Paper%20neutral/WP52%20-%202012-06.pdf
Guan, L. J., & Hong, Y. (2012). An empirical analysis on U.S. foreign trade and economic growth. AASRI Conference on Power and Energy Systems, 2 (2012), 39-43.
Herlitz, L. (1964). The concept of mercantilism, Scandinavian Economic History Review, 12:2, 101-120, DOI: 10.1080/03585522.1964.10407639. DOI: https://doi.org/10.1080/03585522.1964.10407639
Idris, J., Yusop, Z. &Habibullah, M.S. (2016). Trade openness and economic growth: A causality test in panel perspective.International Journal of Business and Society,17(2),281-290.
Khobai, H. & Mavikela, N. (2017). The causal linkage between trade openness and economic growth in Argentina: Evidence from the ARDL and VECM techniques. Working Papers 1712, Department of Economics, Nelson Mandela University, revised Oct 2017. Retrieved online http://repec.mandela.ac.za/RePEc/mnd/wpaper/paper.1712.pdf
Lawan, M.W. (2017). Cointegration and Causality between Exports and Economic Growth: Evidence from Nigeria. Journal of Economics and Sustainable Development, 8(14), 91-99.
Leo, M. &Zestos, G. K. (2004). Exports, imports and GDP growth: Causal relations in six European Union countries. The Journal of Economic Asymmetries, 1, 71-85. 10.1016/j.jeca.2004.02.004. DOI: https://doi.org/10.1016/j.jeca.2004.02.004
Shakouri, B. &Yazdi, S. (2012). Granger Causality Relationship between Mining Exports and GDP Growth in Iran. Australian Journal of Basic and Applied Sciences,6(12), 429-435.
Singh, T. (2015). Trade openness and economic growth in Canada: An evidence from time-series tests. Global Economy Journal, 15(3),361-407. DOI: https://doi.org/10.1515/gej-2014-0009
Sun, P. & Heshmati, A. (2010). International Trade and its Effect on Economic Growth in China. IZA Discussion Paper No. 5151, The Institute for the Study of Labour, Germany. Retrieved from http://ftp.iza.org/dp5151.pdf
Were, M. (2015). Differential effects of trade on economic growth and investment: A cross-country empirical investigation, Journal of African Trade 2:1-2, 71–85, DOI: http://dx.doi.org/10.1016/j.joat.2015.08.002 DOI: https://doi.org/10.1016/j.joat.2015.08.002
Zestos, G.K. & Tao, X. (2002). Trade and GDP Growth: Causal Relations in the United States and Canada. Southern Economic Journal, 68(4), 859-874. DOI: https://doi.org/10.2307/1061496
Published
How to Cite
Issue
Section
License
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.
