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Export-Led Growth in India: What Do the Vars Reveal?

Author

Listed:
  • Geethanjali Nataraj

    (National Institute of Bank Management)

  • Pravakar Sahoo

    (Institute for social and Economic Change)

  • B Kamaiah

Abstract

This paper attempts to test the long run relationships among exports, imports, gross domestic capital formation, trade policy and GDP in India using annual data from 1965- 66 to 1997- 98. The empirical framework of Vector Autoregressions (VARs) augmented with an error correction mechanism has been employed. The issue of the presence of a structural break while testing for unit roots in the data, has also been tackled using Perron’s (1987, 1997) tests. The forecast error variance decomposition (FEVD) technique is employed to account for error variance in each of the variables in the VAR system, to innovations in its own as well as other variables in the system. The FEVD test reveals that exports and imports are largely explained by their own innovations. The findings of the study do not lend support to the export-led growth hypothesis in India.

Suggested Citation

  • Geethanjali Nataraj & Pravakar Sahoo & B Kamaiah, 2001. "Export-Led Growth in India: What Do the Vars Reveal?," Working Papers 84, Institute for Social and Economic Change, Bangalore.
    • Handle: RePEc:sch:wpaper:84
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    File URL: http://www.isec.ac.in/Reexamination_of_the_long_run_relationship.pdf
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    Cited by:

    1. Sahoo, Pravakar & Dash, Ranjan Kumar, 2014. "India's surge in modern services exports: Empirics for policy," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 1082-1100.
    2. Manoj Kumar DAS & Titiksha DAS, 2020. "Determinants of economic growth in India: A time series perspective," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(623), S), pages 263-280, Summer.
    3. Biru Paksha Paul & Anupam Das, 2012. "Export-led Growth in India and the Role of Liberalisation," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(1), pages 1-26, February.
    4. Pravakar Sahoo & Ranjan Kumar Dash, 2017. "What Drives India's Surge in Service Exports?," The World Economy, Wiley Blackwell, vol. 40(2), pages 439-461, February.

    More about this item

    Keywords

    Economic Growth; Exports;

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