Theoretical and Applied Economics
No. 2 / 2018 (615), Summer
Exports, imports and economic growth in India: Evidence from cointegration and causality analysis
University of Hyderabad, India
Abstract. The relationship between exports, imports and economic growth in India has been analysed by a large number of empirical studies in the recent past. However, this paper examines the relationship between exports, imports and economic growth in an unexplored way. The study uses monthly dataset for the first time. Johansen’s Co-integration and Granger causality tests were employed in the empirical analysis, using Augmented Dickey Fuller (ADF) and Dickey Fuller (DF) tests. The present study covers data of 12 years’ period from April 2005 to March 2017. The variables used for the study are of I (1) i.e. first order of difference means that they are stationary at first order difference. The Johansen and Juselius Cointegration test was used to determine the presence of a cointegration vector in the variables. Both the ‘Trace and Max-Eigen’ values specified cointegration at 5 percent level of significance, specifying that the variables have a long run relationship. The results of the Granger causality test show that there is bidirectional causality running between exports and economic growth (IIP) as well as imports and economic growth. Therefore, the study confirms that there is bidirectional causality has been found between exports and economic growth which support export-led growth and growth-led export hypothesis. However, this study finally suggests that both growth as well as export promotion strategy are to be pursued consistently with an emphasis on sustainable and inclusive growth.
Contents
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Corruption, governments’ debts, trade, and global growth
Innovation – trends and patterns at Romanian firms
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Analyzing the employment rate of the population, unemployment and vacancies in the economy
An implicit model of adjustment costs in differential input demand systems
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Studying the political economy of reforms: The Greek case, 2010-2017
Analysis of the evolution of the number of pensioners and pensions in Romania
Inflation unemployment dynamics in Hungary – A structured cointegration and vector error correction model approach
Are defence expenditures the reasons of foreign debts in Turkey?
Exports, imports and economic growth in India: Evidence from cointegration and causality analysis
The role of economic growth and energy consumption on CO2 emissions in E7 countries
Which comes first – savings or growth? Time series evidence from ECOWAS countries