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Price and income elasticity of Indian exports—The role of supply-side bottlenecks

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  • Raissi, Mehdi
  • Tulin, Volodymyr

Abstract

This paper estimates the short-term and long-run price and income elasticity of Indian exports, and investigates the role of supply-side bottlenecks in shaping India’s export demand relationship. We use disaggregated export volume data for 45 Indian industries over the period 1990–2013, as well as industry-specific international relative prices, for estimation. Our results indicate that Indian exports are sensitive to international relative-price competitiveness, world demand, and energy shortages. In addition, binding supply-side constraints (notably energy shortages) dampen price responsiveness in the short-term.

Suggested Citation

  • Raissi, Mehdi & Tulin, Volodymyr, 2018. "Price and income elasticity of Indian exports—The role of supply-side bottlenecks," The Quarterly Review of Economics and Finance, Elsevier, vol. 68(C), pages 39-45.
  • Handle: RePEc:eee:quaeco:v:68:y:2018:i:c:p:39-45
    DOI: 10.1016/j.qref.2017.11.003
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    Citations

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    Cited by:

    1. Elif C Arbatli Saxegaard & Gee Hee Hong, 2016. "Singapore’s Export Elasticities; A Disaggregated Look into the Role of Global Value Chains and Economic Complexity," IMF Working Papers 16/52, International Monetary Fund.
    2. Jorge A. Fornero & Miguel A. Fuentes & Andrés Gatty, 2017. "How do manufacturing exports react to RER and foreign demand? The Chilean case," Working Papers Central Bank of Chile 810, Central Bank of Chile.

    More about this item

    Keywords

    India; Export demand; Manufacturing; Income and price elasticity; Energy shortages;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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