IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-981-99-2299-4_4.html
   My bibliography  Save this book chapter

Foreign Aid-Growth Nexus in India: Cointegration and Causality

In: Foreign Capital and Economic Growth in India

Author

Listed:
  • Mahendra Pal

    (University of Delhi)

Abstract

Chapter 4 tests empirically Foreign Aid-Growth nexus in India for the period of 1971–2013. The chapter improves upon earlier work on Foreign Aid-Growth nexus, because it involves Johansen Cointegration technique of 1991 to trace the long-run relationship between Foreign Aid and economic growth in India. After confirming the order of integration, Trace Statistic and Maximum Eigenvalue confirms the positive and long-run relationship between Foreign Aid and Economic Growth in India. Further 1% rise in Aid/GDP ratio causes 0.36% growth rate to increase in India. ECT value is equal to –0.31which shows that during one year period, the level of disequilibrium is corrected by 31%. Granger causality confirms strong causal directions from Foreign Aid to Growth in India. Results are also reconfirmed with the application of IRF and VDC Foreign Aid has made positive contribution in India. Findings are consistent with (Burnside and Dollar, American Economic Review 90:847–868, 2000), Addison et al. (2018), Mallick (2008), (Collier and Dollar, European Economic Review 46:1475–1500, 2002).

Suggested Citation

  • Mahendra Pal, 2023. "Foreign Aid-Growth Nexus in India: Cointegration and Causality," Springer Books, in: Foreign Capital and Economic Growth in India, chapter 0, pages 85-117, Springer.
    • Handle: RePEc:spr:sprchp:978-981-99-2299-4_4
    DOI: 10.1007/978-981-99-2299-4_4
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-981-99-2299-4_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.