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An Empirical Analysis of the Aggregate Export Demand Function in Post-Liberalization India

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  • Inoue Takeshi

    () (Faculty of Policy Studies, Nanzan University, Seto, Aichi, Japan)

Abstract

This paper focuses on export growth as an engine of growth and, by estimating India’s export demand function, examines whether and to what extent India’s export trend has been affected by external factors, particularly in the post-liberalization period. The empirical results indicate that all estimated coefficients are statistically significant with expected signs and that the absolute value of the coefficient is the largest for the world price, followed by world income and domestic income. Our results reveal that price competitiveness has improved India’s export market. Moreover, the statistically significant world income elasticity suggests that the global economic boom may contribute to an increase in India’s exports, whereas the global recession has likely had an adverse impact on the Indian economy through its trade channel. To ensure that export expansion becomes a stable contributor to economic growth, the Indian government should pursue ongoing diversification in exports in terms of both commodities and markets.

Suggested Citation

  • Inoue Takeshi, 2014. "An Empirical Analysis of the Aggregate Export Demand Function in Post-Liberalization India," Global Economy Journal, De Gruyter, vol. 14(1), pages 1-10, June.
  • Handle: RePEc:bpj:glecon:v:14:y:2014:i:1:p:10:n:3
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    References listed on IDEAS

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    1. Ramesh Chandra, 2003. "Reinvestigating export-led growth in India using a multivariate cointegration framework," Journal of Developing Areas, Tennessee State University, College of Business, vol. 37(1), pages 73-86, September.
    2. Nasim Shah Shirazi & Turkhan Ali Abdul Manap, 2005. "Export-Led Growth Hypothesis: Further Econometric Evidence From South Asia," The Developing Economies, Institute of Developing Economies, vol. 43(4), pages 472-488, December.
    3. Jim Love & Ramesh Chandra, 2005. "Testing export-led growth in South Asia," Journal of Economic Studies, Emerald Group Publishing, vol. 32(2), pages 132-145, May.
    4. Abhijit Das & Rashmi Banga & Dinesh Kumar, 2011. "Global Economic Crisis : Impact and Restructuring of the Services Sector in India," Trade Working Papers 23225, East Asian Bureau of Economic Research.
    5. Jim Love & Ramesh Chandra, 2004. "Testing Export-Led Growth in India, Pakistan and Sri Lanka Using a Multivariate Framework," Manchester School, University of Manchester, vol. 72(4), pages 483-496, July.
    6. Abhijit Sharma & Theodore Panagiotidis, 2005. "An Analysis of Exports and Growth in India: Cointegration and Causality Evidence (1971-2001)," Review of Development Economics, Wiley Blackwell, vol. 9(2), pages 232-248, May.
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    Cited by:

    1. Mishra Prachi & Roy Devesh, 2016. "India-Us Trade and Investment: Have They Been Up To Potential?," Global Economy Journal, De Gruyter, vol. 16(3), pages 539-567, September.
    2. Alia Didier Yelognisse, 2015. "Geographical Orientation of Export in Manufacturing Sector in Sub-Sahara Africa," Global Economy Journal, De Gruyter, vol. 15(3), pages 337-351, September.
    3. repec:eee:asieco:v:51:y:2017:i:c:p:23-32 is not listed on IDEAS

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