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Revisited Export-Led Growth Hypothesis

Author

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  • Ranjan Kumar Dash

    (Ranjan Kumar Dash is Associate Fellow, National Council of Applied Economic Research (NCAER), Parishila Bhawan #11, Indraprastha Estate, New Delhi 2. Email: rkumardash@yahoo.com)

Abstract

Over the years, there has been extensive research on the relationship between a country’s export and economic growth with ambiguous and mixed results. The mixed results are due to bi-variate approach used in the analysis and periodisation (combining both import substitution and export promotion periods).This article corrects these two problems and uses co-integration and error-correction models to analyze the causal relationship between export growth and economic growth in India for post-liberalization period (1992[Q1]–2007[Q4]). The results indicate that there exists a long-term relationship between output and exports, and it is unidirectional, running from exports to output growth. Hence, in the case of India, further liberalization of trade policies are recommended in promoting and sustaining economic growth.

Suggested Citation

  • Ranjan Kumar Dash, 2009. "Revisited Export-Led Growth Hypothesis," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(2), pages 305-324, July.
    • Handle: RePEc:sae:soueco:v:10:y:2009:i:2:p:305-324
    DOI: 10.1177/139156140901000203
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    References listed on IDEAS

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    More about this item

    Keywords

    JEL: F43; JEL: F49; JEL: O51; JEL: O52; JEL: O53; Causality; Economic Growth; Export-led Growth Hypothesis; Multivariate Co-integration Test;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F49 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Other
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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