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Revisiting Export-Led Growth Hypothesis: An Empirical Study On South Asia

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  • Neena MALHOTRA
  • Deepika KUMARI

Abstract

This study reinvestigates the export-led growth hypothesis for the four largest economies of South Asian sub region namely India, Pakistan, Bangladesh, and Sri Lanka under multivariate time-series framework. The study utilizes annual data for the period 1980 to 2012. Most of the previous studies are based on either bivariate or trivariate framework. Hence, to remove misspecification bias, present study includes imports, gross capital formation and labour as additional variables apart from exports and gross domestic product (GDP) per capita. The study applied statistical techniques such as Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root tests, Johansen cointegration test and Vector Error Correction Model (VECM). Forecasting techniques namely Impulse Response Function (IRF) and Variance Decomposition Analysis (VDA) were used to investigate the interrelationship within the system. Diagnostic tests for normality, heteroskedasticity, autocorrelation were conducted using Jarque-Bera Normality test, ARCH Heteroskedasticity test and Breusch-Godfrey LM test. The results of short-run causality based on VECM including the directions thence varied country to country.

Suggested Citation

  • Neena MALHOTRA & Deepika KUMARI, 2016. "Revisiting Export-Led Growth Hypothesis: An Empirical Study On South Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 16(2), pages 157-168.
    • Handle: RePEc:eaa:aeinde:v:16:y:2016:i:2_12
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    References listed on IDEAS

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    Cited by:

    1. Maite CANCELO & Emilia VAZQUEZ-ROZAS, 2020. "Las Exportaciones Como Fuente De Crecimiento Económico: Un Modelo Econométrico Para Galicia 2002-2019," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 20(1), pages 111-124.
    2. Mukesh Kumar & Nargis & Azeema Begam, 2020. "Export-Led Growth Hypothesis: Empirical Evidence from Selected South Asian Countries," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 8(1), pages 1-15, March.

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    More about this item

    Keywords

    Export-led Growth; Southeast Asia; time series; cointegration; VECM; impulse response function; variance decomposition analysis.;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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