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The Dynamics of Relationship between exports and economic growth in India

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  • P. K. Mishra

    ()
    (Siksha O Anusandhan University, Khandagiri, Bhubaneswar, Orissa, India, 751030)

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    Abstract

    In this era of open economy, nations are concerned with increasing the quality of life of their citizens. And, the quality of life mainly comes from the macro-economic prosperity. Thus, fast growth of gross domestic Product has become the most important objective of any economy. There are various approaches to achieve this target of which one strategy is to promote exports of the country. At this juncture, an important issue immediately breaks the minds of economists and researchers, that is, whether export promotion leads to higher economic growth or economic growth promotes exports. Thus, this paper is an attempt to reinvestigate the dynamics of the relationship between exports and economic growth for India over the period 1970 to 2009. Applying popular time series econometric techniques of cointegration and vector error correction estimation, the study provides the evidence of stationarity of time series variables, existence of long-run equilibrium relation between them, and finally, the rejection of exportled growth hypothesis for India by the Granger causality test based on vector error correction model estimation.

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    Bibliographic Info

    Article provided by Technological Educational Institute (TEI) of Kavala, Greece in its journal International Journal of Economic Sciences and Applied Research (IJESAR).

    Volume (Year): 4 (2011)
    Issue (Month): 2 (August)
    Pages: 53-70

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    Handle: RePEc:tei:journl:v:4:y:2011:i:2:p:53-70

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    Related research

    Keywords: Export-led Growth Hypothesis; India; GDP; Granger Causality; Error Correction Model;

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    References

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    1. Voxi Heinrich Amavilah, 2003. "Exports and Economic Growth in Namibia, 1968-1992," Development and Comp Systems 0307004, EconWPA.
    2. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    3. Chow, Peter C. Y., 1987. "Causality between export growth and industrial development : Empirial evidence from the NICs," Journal of Development Economics, Elsevier, vol. 26(1), pages 55-63, June.
    4. Khaled R.M. ELBEYDI & Abdulbaset M. HAMUDA & Vladimir GAZDA, 2010. "The Relationship between Export and Economic Growth in Libya Arab Jamahiriya," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 1(1(542)), pages 69-76, January.
    5. Subrata Ghatak & Stephen Wheatley Price, . "Export Composition and economic Growth: Cointegration and Causality Evidence for India," Discussion Papers in Economics 96/10, Department of Economics, University of Leicester.
    6. Fosu, Augustin Kwasi, 1990. "Exports and economic growth: The African case," World Development, Elsevier, vol. 18(6), pages 831-835, June.
    7. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    8. Carlos Arnade & Utpal Vasavada, 1995. "Causality Between Productivity And Exports In Agriculture: Evidence From Asia And Latin America," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 174-186.
    9. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    10. Andre c Jordaan & Joel hinaunye Eita, 2007. "Export And Economic Growth In Namibia: A Granger Causality Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 75(3), pages 540-547, 09.
    11. Bahmani-Oskooee, Mohsen & Mohtadi, Hamid & Shabsigh, Ghiath, 1991. "Exports, growth and causality in LDCs : A re-examination," Journal of Development Economics, Elsevier, vol. 36(2), pages 405-415, October.
    12. Thornton, John, 1996. "Cointegration, causality and export-led growth in Mexico, 1895-1992," Economics Letters, Elsevier, vol. 50(3), pages 413-416, March.
    13. pazim, Khairul Hanim, 2009. "Panel data analysis of “Export-led” Growth Hypothesis in BIMP-EAGA Countries," MPRA Paper 13264, University Library of Munich, Germany.
    14. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    15. Tuck Cheong Tang, 2006. "New evidence on export expansion, economic growth and causality in China," Applied Economics Letters, Taylor & Francis Journals, vol. 13(12), pages 801-803.
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    Cited by:
    1. Greenwell Collins Matchaya & Pius Chilonda & Sibusiso Nhelengethwa, 2013. "International Trade and Income in Malawi: A Co-integration and Causality Approach," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 6(2), pages 125-147, September.

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