India’s Service Trade and Asymmetry in J-curve: The Evidence from Linear and Nonlinear Models

Abstract

Studies about the J-curve have primarily focused on the trade in goods, and the application of the concept in the trade in services is a relatively new area of research. This study attempts to contribute to the literature on the J-curve by testing for the presence of symmetric and asymmetric J-curves in India’s services trade with the world in six sectors: Commercial Services, Insurance, Goods-related Services, Charges for the Use of Intellectual Property, Travel and Other Business Services. The study finds evidence for a J-curve in all six sectors, with some supporting a symmetric J-curve and others supporting an asymmetric J-curve.

JEL Codes: C22, F14, F31, G20

Keywords

India services J-curve real effective exchange rate NARDL

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