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Cotton Imports and GDP of Indonesia- Cointegration Analysis

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  • Soumya, P.
  • Yeledhalli, R. A.

Abstract

The study examines the impact of cotton imports on the real GDP (Gross Domestic Product) of Indonesia for a period from 1992 to 2018 using ARDL approach and Granger causality analysis. Results of the study indicated that cotton imports have negative effect on economic growth. For every 1% increase in cotton imports the real GDP decreased by 0.107% in the long run. Any disequilibrium in the model is adjusted with a high speed of adjustment of 107.7% in less than a year. Shocks and the trend are adjusted in less than one year. There is no causality between imports of cotton and the real GDP. The study suggested effort should be taken by the government to increase yield of cotton by the use of technology and also a need to initiate farmers to take up cotton farming.Â

Suggested Citation

  • Soumya, P. & Yeledhalli, R. A., 2021. "Cotton Imports and GDP of Indonesia- Cointegration Analysis," Asian Journal of Agricultural Extension, Economics & Sociology, Asian Journal of Agricultural Extension, Economics & Sociology, vol. 39(4).
    • Handle: RePEc:ags:ajaees:358002
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    File URL: https://ageconsearch.umn.edu/record/358002/files/sciencedomain%2C%2BSoumya3942021AJAEES68529.pdf
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    References listed on IDEAS

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    1. Faridul Islam & Qazi Muhammad Adnan Hye & Muhammad Shahbaz, 2012. "Import‐economic growth nexus: ARDL approach to cointegration," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 5(3), pages 194-214, September.
    2. Narayan, Paresh Kumar & Smyth, Russell, 2008. "Energy consumption and real GDP in G7 countries: New evidence from panel cointegration with structural breaks," Energy Economics, Elsevier, vol. 30(5), pages 2331-2341, September.
    3. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    4. Faridul Islam & Qazi Muhammad Adnan Hye & Muhammad Shahbaz, 2012. "Import‐economic growth nexus: ARDL approach to cointegration," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 5(3), pages 194-214, September.
    5. repec:eme:jcefts:v:5:y:2012:i:3:pp:194-214 is not listed on IDEAS
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