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

Abhijit Sharma, Theodore Panagiotidis

Research output: Contribution to journalArticle

26 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)232-248
Number of pages17
JournalReview of Development Economics
Volume9
Issue number2
Early online date28 Apr 2005
DOIs
Publication statusPublished - 1 May 2005
Externally publishedYes

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