Export promotion has been central to India’s export-import policies since
the late 1990s and exports are seen as a potential engine of growth. This paper
examines India’s export-income relationship for 1950-99 using vector
autoregressive models. Results show no cointegrating long-run relationship but
Granger-causality tests and impulse responses indicate short-run feedback: a 1%
increase in exports (income) leads to a 0.06% (0.35%) increase in income (exports)
in the following year and these effects are long-lived. Export promotion policies
appear justified.
Amirkhalkhali, S.
and
Dar, A. A.1995:
A varying-coefficient model of export expansion, factor accumulation and
economic growth: evidence from cross-country, time series data
. Economic Modelling12,
435-441
.
2.
Anwer, M. S.
and
Sampath, R. K.2001:
Exports and economic growth
. Indian Economic Journal47,
79-88
.
3.
Asafu-Adjaye, J.
and
Chakraborty, D.1999:
Export-led growth and import compression: further time series evidence from LDCs
. Australian Economic Papers38,
164-175
.
4.
Bajpai, N.
and
Sachs, J. D.1998:
Strengthening India’s strategy for economic growth
. Economic and Political Weekly33 (31 July),
29-30
.
5.
Dhananjayan, R. S.
and
Devi, N. S.1997:
Exports and economic growth: a study of select nations in Asia and Europe
during 1980-81 to 1993-94
. Indian Journal of Applied Economics6,
41-63
.
6.
Dhawan, U.
and
Biswal, B.1999:
Re-examining export-led growth hypothesis: a mulitvariate cointegration
analysis for India
. Applied Economics31,
525-530
.
7.
Dickey, D. A.
and
Fuller, W. A.1981:
Likelihood ratio statistics for autoregressive time series with a unit root
. Econometrica49,
1057-1072
.
8.
Doan, T. A.2000: RATS user’s guide.
Evanston: Estima
.
9.
Dodaro, S.1993:
Exports and growth: a reconsideration of causality
. Journal of Developing Areas27,
245-278
.
10.
Dufour, J.-M.
and
Renault, E.1998:
Short run and long run causality in time series: theory
. Econometrica66,
1099-1125
.
11.
Dutt, S. D.
and
Ghosh, D.1994:
An empirical investigation of the export growth-economic growth relationship
. Applied Economic Letters1,
44-48
.
12.
Engle, R. F.
and
Granger, C. W. J.1987:
Cointegration and error correction: representation, estimation and testing
. Econometrica55,
251-276
.
13.
Feder, G.1983:
On exports and economic growth
. Journal of Development Economics12,
59-73
.
14.
Fuller, W. A.1976: Introduction to statistical time series.
New York: John Wiley
.
15.
Ghatak, S.
and
Price, S. W.1997:
Export composition and economic growth: cointegration and causality
evidence for India
. Weltwirtschaftliches Archiv (Review of World Economics)133,
538-553
.
16.
Giles, J. A.
and
Williams, C. L.2000:
Export-led growth: a survey of the empirical literature and some
non-causality results. Part 1
. Journal of International Trade and Economic Development9,
261-337
.
17.
Government of India1957: Review of the first five year plan.
Delhi: Government of India, Planning Commission
.
18.
Government of India1961: Third five year plan.
Delhi: Government of India, Planning Commission
.
19.
Government of India1996: Economic survey, 1995-96.
Delhi: Government of India, Ministry of Finance
(Economic Division).
20.
Government of India1999: EXIM policy, 1997-2002.
Delhi: Government of India, Press Information Bureau
. Retrieved 31 August 2004 from http://pib.nic.in/archieve/others/eximsp99.html
21.
Government of India2002: EXIM policy, 2002-2007.
Delhi: Government of India, Ministry of
Commerce and Industry, Directorate General of Foreign Trade
. Retrieved 31 August 2004 from http://dgft.delhi.nic.in
22.
Granger, C. W. J.1988:
Some recent developments in a concept of causality
. Journal of Econometrics39,
199-211
.
23.
Greene, W. H.2000: Econometric analysis.
Englewood Cliffs NJ: Prentice-Hall, Inc.
24.
Hamilton, J. D.1994: Time series analysis.
Princeton, NJ: Princeton University Press
.
25.
Harris, R.1995: Using cointegration analysis in econometric modelling.
London: Prentice Hall, Harvester Wheatsheaf
.
26.
Heller, P. S.
and
Porter, R. C.1978:
Exports and growth: an empirical re-investigation
. Journal of Development Economics5,
191-193
.
27.
Hutchinson, M.
and
Singh, N.1992:
Exports, non-exports and externalities: a Granger causality approach
. International Economic Journal6,
79-94
.
28.
International Monetary Fund
, various dates: International financial statistics yearbook.
Washington DC: International Monetary Fund
.
29.
Islam, M. N.1998:
Export expansion and economic growth: testing for cointegration and causality
. Applied Economics30,
415-425
.
30.
Johansen, S.1988:
Statistical analysis of cointegrating vectors
. Journal of Economic Dynamics and Control12,
231-254
.
31.
Johansen, S.1992:
Determination of the cointegration rank in the presence of a linear trend
. Oxford Bulletin of Economics and Statistics54,
383-397
.
32.
Johansen, S.1994:
The role of the constant and linear terms in cointegration analysis of
nonstationary variables
. Econometric Reviews13,
205-229
.
33.
Jung, W. S.
and
Marshall, P. J.1985:
Exports, growth and causality in developing countries
. Journal of Development Economics18,
1-12
.
34.
Kemal, A. R.
,
ud Din, M.
,
Qadir, U.
,
Frenando, L.
and
Colombage, S. S.2002: Exports and Economic Growth in South Asia, South Asia Network
of Economic Research Institutes. Retrieved from http://www.saneinetwork.org/pdf/SANEI_II/Exports_and_Economic_Growth_in_South%2520Asia.pdf
35.
Kunst, R. M.
and
Marin, D.1989:
On exports and productivity: a causal analysis
. Review of Economics and Statistics71,
699-703
.
36.
Mallick, S. K.1994:
Exports and economics growth
. Journal of Indian School of Political Economy6,
505-515
.
37.
Mallick, S. K.1995:
International trade and economic growth: an examination of interdependence
using VARs with reference to India
. Journal of Foreign Exchange and International Finance8,
437-446
.
38.
Mallick, S. K.1996:
Causality between exports and economic growth in India: evidence from
cointegration based error correction models
. Indian Journal of Economics76,
307-320
.
39.
Mallick, S. K.2002:
Determinants of long-term growth in India: a Keynesian approach
. Progress in Development Studies2,
306-324
.
40.
Marin, D.1992:
Is the export-led growth hypothesis valid for industrialized countries?Review of Economics and Statistics74,
678-688
.
41.
Michaely, M.1977:
Exports and growth: an empirical investigation
. Journal of Development Economics4,
49-53
.
42.
Nandi, S.
and
Biswas, B.1991:
Export and economic growth in India: empirical evidence
. Indian Economic Journal38,
53-59
.
43.
Nidugala, G. K.2001:
Exports and economic growth in India: an empirical investigation
. Indian Economic Journal47,
67-78
.
44.
Osterwald-Lenum, M.1992:
A note with quantiles of the asymptotic distribution of the maximum
likelihood cointegration rank test statistics
. Oxford Bulletin of Economics and Statistics54,
461-472
.
45.
Perron, P.1989:
The great crash, the oil shock and the unit root hypothesis
. Econometrica57,
1361-1402
.
46.
Pesaran, M. H.
and
Shin, Y.1998:
Generalized impulse response analysis in linear multivariate models
. Economic Letters58,
17-29
.
47.
Phillips, P. C. B.
and
Ouliaris, S.1990:
Asymptotic properties of residual based variables in regressions with I(1) processes
. Review of Economic Studies57,
99-125
.
48.
Ram, R.1987:
Exports and economic growth in developing countries: evidence from
time-series and cross-section data
. Economic Development and Cultural Change36,
51-72
.
49.
Rashid, A. I.1995:
Trade, growth, and liberalization: the Indian experience, 1977-1989
. Journal of Developing Areas29,
355-370
.
50.
Riezman, R. G.
,
Whiteman, C. H.
and
Summers, P. M.1996:
The engine of growth or its handmaiden? a time series assessment of
export-led growth
. Empirical Economics21,
77-110
.
51.
Runkle, D.1987:
Vector autoregressions and reality
. Journal of Business and Economic Statistics5,
437-442
.
52.
Said, S. E.
and
Dickey, D. A.1984:
Testing for unit roots in autoregressive-moving average models of unknown order
. Biometrica71,
599-607
.
53.
Salvatore, D.
and
Hatcher, T.1991:
Inward oriented and outward oriented trade strategies
. Journal of Developing Studies27,
7-25
.
54.
Seshan, P. A.2000:
The dollar chase: new EXIM policy aims at higher export earning
. The Week 16 April. Retrieved June 2002 from http://www.the-week.com/
55.
Sharma, S. C.
and
Dhakal, D.1994:
Causal analyses between exports and economic growth in developing countries
. Applied Economics26,
1145-1157
.
56.
Sims, C. A.1980:
Macroeconomics and reality
. Econometrica48,
1-49
.
57.
Toda, H. Y.
and
Yamamoto, T.1995:
Statistical inference in vector autoregressions with possibly integrated processes
. Journal of Econometrics66,
225-250
.
58.
Xu, Z.1996:
On the causality between export growth and GDP growth: an empirical re-investigation
. Review of International Economics4,
172-184
.
59.
Zivot, E.
and
Andrews, D.1992:
Further evidence on the great crash, the oil price shock and the unit root hypothesis
. Journal of Business Economics and Statistics10,
252-279
.
