An Analysis of Exports and Growth in India: Cointegration and Causality Evidence (1971-2001)

17 Pages Posted: 29 Apr 2005

See all articles by Abhijit Sharma

Abhijit Sharma

Bradford School of Management; Imperial College London

Theodore Panagiotidis

University of Macedonia - Department of Economics

Abstract

The relationship between exports and economic growth has been analysed by a number of recent empirical studies. This paper re-examines the sources of growth for the period 1971-2001 for India. It builds upon Feder's (1983) model to investigate empirically the relationship between export growth and GDP growth (the export led growth hypothesis), using recent data from the Reserve Bank of India, and by focusing on GDP growth and GDP growth net of exports. We investigate the following hypotheses: (i) whether exports, imports and GDP are cointegrated using the Johansen approach and Breitung's nonparametric cointegration test; (ii) whether export growth Granger causes GDP growth; (iii) and whether export growth Granger causes investment. Finally, a VAR is constructed and impulse response functions (IRFs) are employed to investigate the effects of macroeconomic shocks.

Suggested Citation

Sharma, Abhijit and Panagiotidis, Theodore, An Analysis of Exports and Growth in India: Cointegration and Causality Evidence (1971-2001). Available at SSRN: https://ssrn.com/abstract=712952

Abhijit Sharma

Bradford School of Management ( email )

Emm Lane
Bradford, West Yorkshire Bd9 4JL
United Kingdom

HOME PAGE: http://www.manag.brad.ac.uk/people/people.php?name=asharm12

Imperial College London ( email )

Wye Campus
Wye
Ashford (Kent), TN25 5AH
United Kingdom

HOME PAGE: http://www.imperial.ac.uk/people/abhijit.sharma

Theodore Panagiotidis (Contact Author)

University of Macedonia - Department of Economics ( email )

Thessaloniki, 54006
Greece

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