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Are Indian Exports And Imports Cointegrated?

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  • KONYA, Laszlo

  • SINGH, Jai Pal

Abstract

The purpose of this study is to investigate empirically the presence of an equilibrium relationship between the logarithms of Indian exports and imports between 1949/50 and 2004/2005, using the unit-root, cointegration approach. To ascertain robustness, exports and imports measured in current prices but in two currencies, Indian rupee and US dollar have been analyzed. Moreover, since the sample comprises data from both the fixed and freely floating exchange rate periods, the tests have also been performed allowing for a one-time structural break in 1992/93. The results indicate no-cointegration between exports and imports. The lack of cointegration means that Indian macroeconomic policies have been ineffective in bringing exports and imports into long-run equilibrium and India is in violation of her international budget constraint.

Suggested Citation

  • KONYA, Laszlo & SINGH, Jai Pal, 2008. "Are Indian Exports And Imports Cointegrated?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(2), pages 177-186.
    • Handle: RePEc:eaa:aeinde:v:8:y:2008:i:2_14
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    3. Abdulla S. Al-Khulaifi, 2013. "Exports and Imports in Qatar: Evidence from Cointegration and Error Correction Model," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1122-1133, September.
    4. Athira A & Rajendran S, 2025. "Macro analysis of linkages between export, import and economic growth: evidence from the Indian economy," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(642), S), pages 289-302, Spring.
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    7. Aviral Kumar Tiwari, 2012. "Are trade deficits sustainable? Evidence from the ASEAN-five," International Journal of Social Economics, Emerald Group Publishing, vol. 40(1), pages 68-82, December.
    8. Khyati Kathuria & Nand Kumar, 2021. "An Empirical Investigation of the Disaggregated Import Demand Function: Non-linear ARDL Framework," Foreign Trade Review, , vol. 56(2), pages 197-205, May.
    9. Antwi-Boateng, Cosmos, 2015. "Is Ghana achieving sustainable trade balance in the participation of international trade? time series assessment for Ghana," MPRA Paper 67268, University Library of Munich, Germany.
    10. Khyati Kathuria & Nand Kumar, 2022. "Are exports and imports of India’s trading partners cointegrated? Evidence from Fourier bootstrap ARDL procedure," Empirical Economics, Springer, vol. 62(3), pages 1177-1191, March.
    11. KHOKHAR, Joga Singh, 2010. "Will India’S Trade Deficit Ever Converge To Zero?- An Application Of Bounds Testing Approach To Co-Integration," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    12. Soo Khoon Goh & Tuck Cheong Tang & Chung Yan Sam, 2020. "Are Major US Trading Partners’ Exports and Imports Cointegrated? Evidence from Bootstrap ARDL," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 14(1), pages 7-27, February.
    13. Genci Gjanci & Ardian Cerava, 2014. "An empirical analysis of the trade balance in postcommunist Albania," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 7(1), pages 33-42, June.
    14. Nag, Biswajit & Mukherjee, Jaydeep, 2012. "The sustainability of trade deficits in the presence of endogenous structural breaks: Evidence from the Indian economy," Journal of Asian Economics, Elsevier, vol. 23(5), pages 519-526.
    15. Ali Farhan Chaudhry & Abdul Rauf Butt & Muhammad Irfan Chani, 2017. "Long-Run Relationship between Exports and Imports of Pakistan," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(8), pages 204-211, August.
    16. Alice Constance Mensah & Ebenezer Okyere, 2018. "Analysis of Ghana,s Imports and Exports," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 4(1), pages 1-6, 01-2018.
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    19. Tiwari, Aviral, 2010. "Is trade deficit sustainable in India? An inquiry," MPRA Paper 24451, University Library of Munich, Germany.

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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • 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
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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