Revisiting the export-growth nexus for India: an empirical exercise. (6th October 2020)

• Record Type: Journal Article
• Authors: Dixit, Vikas; Parveen, Shaista
• Is Part Of: International journal of economic policy in emerging economies. Volume 13:Number 5(2020)
• Page Start: 526
• Page End: 554
• Publication Date: 2020-10-06
• Subjects: export-led growth -- growth-led export -- demand-side -- supply-side -- export diversification -- export composition; Russia (Federation) -- Economic policy -- 1991- -- Periodicals; Former Soviet republics -- Economic policy -- 1991- -- Periodicals; China -- Economic policy -- 1991- -- Periodicals; 338.947
• Languages: English
• ISSNs: 1752-0452

Abstract

This paper attempts to investigate empirically the export-growth nexus for India from different theoretical perspectives. Using robust time series techniques, and considering both demand-side and supply-side explanations of the relationship between export and output growth, this paper finds empirical support for export-led growth hypothesis for India for long run and short run from supply-side as well as demand-side perspectives. The demand-side orientation appears to be the better explanation of this relationship during post-liberalisation period. The horizontal export diversification is observed to have U-shaped relationship with output growth. In terms of export composition (or vertical export diversification), share of manufactured exports bear a positive and significant relation with output growth, whereas the positive but insignificant impact of services exports on economic growth underlines the need for a rigorous policy action in this sector. The results of empirical estimation are further confirmed by lag-augmented vector autoregressive non-causality test.