IDEAS home Printed from https://ideas.repec.org/p/pas/asarcc/2014-03.html
   My bibliography  Save this paper

Liberalisation reform and export performance of India

Author

Listed:
  • Ramesh C. Paudel

Abstract

This paper examines the impact of liberalisation reform on export performance of India. The empirical analysis involves estimating an export demand-supply model for manufacturing and merchandised exports, applying ARDL approach to cointegration using annual data for the period 1975-2008. The main advantage of this approach is that, apart from providing robust estimations in small sample sizes, it needs no prior knowledge of the integration properties of the variables. The results suggest that manufacturing and merchandise export demand are mainly determined by world demand, while manufacturing export supply is determined by domestic manufacturing output, FDI and overall liberalisation- initiated in the early 1990s. Contrary to the received view, this study failed to detect a significant negative impact of trade protection on export performance; however, overall liberalisations reforms seem to have positive impact in India’s manufacturing export performance but this is not true in the context of merchandised export performance.

Suggested Citation

  • Ramesh C. Paudel, 2014. "Liberalisation reform and export performance of India," ASARC Working Papers 2014-03, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2014-03
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2014/WP2014_03.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Prema-Chandra Athukorala, 2008. "Export Performance in the Reform Era: Has India Regained the Lost Ground?," Palgrave Macmillan Books, in: Raghbendra Jha (ed.), The Indian Economy Sixty Years After Independence, chapter 6, pages 95-115, Palgrave Macmillan.
    2. Sharma, Kishor, 2000. "Export Growth In India: Has FDI Played a Role?," Center Discussion Papers 28372, Yale University, Economic Growth Center.
    3. Garry Pursell & Nalin Kishor & Kanupriya Gupta, 2007. "Manufacturing Protection in India Since Independence," ASARC Working Papers 2007-07, The Australian National University, Australia South Asia Research Centre.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    5. Kishor Sharma, 2000. "Export Growth in India: Has FDI Played a Role," Working Papers 816, Economic Growth Center, Yale University.
    6. Dani Rodrik & Arvind Subramanian, 2005. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 193-228, September.
    7. Morris Goldstein & Mohsin S. Khan, 2017. "The Supply and Demand for Exports: A Simultaneous Approach," World Scientific Book Chapters, in: TRADE CURRENCIES AND FINANCE, chapter 2, pages 83-104, World Scientific Publishing Co. Pte. Ltd..
    8. Prema-chandra Athukorala, 1991. "An Analysis of Demand and Supply Factors in Agricultural Exports from Developing Asian Countries," Working Papers 1991.02, School of Economics, La Trobe University.
    9. Prema-chandra Athukorala, 2011. "Production Networks and Trade Patterns in East Asia: Regionalization or Globalization?," Asian Economic Papers, MIT Press, vol. 10(1), pages 65-95, Winter/Sp.
    10. Ramesh Chandra Paudel & Nelson Perera, 2009. "Foreign Debt, Trade Openness, Labor Force and Economic Growth: Evidence from Sri Lanka," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 57-64, January.
    11. Sharma, K., 2000. "Export Growth in India: Has FDI Played a Role?," Papers 816, Yale - Economic Growth Center.
    12. James Riedel & Chris Hall & Roger Grawe, 1984. "Determinants of indian export performance in the 1970s," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 120(1), pages 40-63, March.
    13. Mohsen Bahmani‐Oskooee & A. B. M. Nasir, 2004. "ARDL Approach to Test the Productivity Bias Hypothesis," Review of Development Economics, Wiley Blackwell, vol. 8(3), pages 483-488, August.
    14. World Bank, 2010. "World Development Indicators 2010," World Bank Publications - Books, The World Bank Group, number 4373, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Batavia, Bala & Nandakumar, Parameswar, 2017. "The equivalence of export subsidies and import tariff reductions in a macroeconomic model," The Journal of Economic Asymmetries, Elsevier, vol. 15(C), pages 76-80.
    2. Ramesh C. Paudel & Chakra Pani Acharya, 2020. "Financial Development and Economic Growth: Evidence from Nepal," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 32(1), pages 15-36, April.
    3. Ramesh C. Paudel & Chakra Pani Acharya, 2022. "Cooperatives and economic growth in a developing country: The case of Nepal," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 797-815, September.
    4. Ramesh C. Paudel & Resham Thapa-Parajuli & Majed Alharthi, 2020. "Electricity Consumption and Export Performance: Evidence from Nepal," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 529-535.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Tariq Majeed & Eatzaz Ahmad, 2006. "Determinants of Exports in Developing Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 1265-1276.
    2. Muhammad Tariq Majeed & Eatzaz Ahmad, 2007. "FDI and Exports in Developing Countries: Theory and Evidence," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 735-750.
    3. Abdullahi Ahmed & Enjiang Cheng & George Messinis, 2011. "The role of exports, FDI and imports in development: evidence from Sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3719-3731.
    4. Debashis Chakraborty & Jaydeep Mukherjee, 2012. "Is There Any Relationship Between Foreign Direct Investment, Domestic Investment and Economic Growth in India? A Time Series Analysis," Review of Market Integration, India Development Foundation, vol. 4(3), pages 309-337, December.
    5. Chakraborty, Debashis & Mukherjee, Jaydeep & Lee, Jaewook, 2016. "Do FDI Inflows influence Merchandise Exports? Causality Analysis on India over 1991-2016," MPRA Paper 74851, University Library of Munich, Germany.
    6. Sadhana Srivastava, 2006. "The Role Of Foreign Direct Investment In India'S Services Exports: An Empirical Investigation," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 51(02), pages 175-194.
    7. Chakraborty, Chandana & Nunnenkamp, Peter, 2006. "Economic reforms, foreign direct investment and its economic effects in India," Kiel Working Papers 1272, Kiel Institute for the World Economy (IfW Kiel).
    8. Jayanthakumaran, Kankesu & Verma, Reetu & Liu, Ying, 2012. "CO2 emissions, energy consumption, trade and income: A comparative analysis of China and India," Energy Policy, Elsevier, vol. 42(C), pages 450-460.
    9. Seema Joshi, 2008. "From the ‘Hindu rate of growth’ to ‘unstoppable India’: has the services sector played a role?," The Service Industries Journal, Taylor & Francis Journals, vol. 30(8), pages 1299-1312, April.
    10. Dukhabandhu Sahoo & Maathai K. Mathiyazhagan, 2003. "Economic Growth In India: "Does Foreign Direct Investment Inflow Matter?"," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 48(02), pages 151-171.
    11. Gu, Weishi & Awokuse, Titus O. & Yuan, Yan, 2008. "The Contribution of Foreign Direct Investment to China's Export Performance: Evidence from Disaggregated Sectors," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6453, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Amar K.J.R. Nayak, 2007. "Does Direct Investment in Complementary Businesses make Business Sense to Foreign Companies in an Emerging Economy? Case of British American Tobacco in India, 1906–2004," Global Business Review, International Management Institute, vol. 8(2), pages 189-204, December.
    13. Baafi Antwi, Joseph & Oppong Kwakye, Francis, 2010. "Globalization and its influence on Economic Growth performance," MPRA Paper 24608, University Library of Munich, Germany.
    14. Philip R. Lane & Sergio L. Schmukler, 2006. "The international financial integration of China and India," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
    15. Radovan Kastratović, 2020. "The impact of foreign direct investment on host country exports: A meta‐analysis," The World Economy, Wiley Blackwell, vol. 43(12), pages 3142-3183, December.
    16. David Mayer Foulkes., 2007. "Subdesarrollo y globalización," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 155-192, May.
    17. Priya Ranjan & Jibonayan Raychaudhuri, 2011. "Self‐selection vs learning: evidence from Indian exporting firms," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 4(1), pages 22-37, April.
    18. Sadhana Srivastava & Rahul Sen, 2004. "Competing for Global FDI: Opportunities and Challenges for the Indian Economy," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 5(2), pages 233-260, September.
    19. Wim Naudé & Riaan Rossouw, 2011. "Export diversification and economic performance: evidence from Brazil, China, India and South Africa," Economic Change and Restructuring, Springer, vol. 44(1), pages 99-134, April.
    20. Alexander Cobham, "undated". "Capital Account Liberalisation and Poverty," QEH Working Papers qehwps70, Queen Elizabeth House, University of Oxford.

    More about this item

    Keywords

    Exports; Liberalization; Trade; International Trade; India;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • F10 - International Economics - - Trade - - - General
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pas:asarcc:2014-03. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Raghbendra Jha (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

    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.