The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India

Mukherji Ronit; Pandey Divya

doi:doi:10.11648/j.ijber.20140303.13

| Peer-Reviewed

The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India

Mukherji Ronit, Pandey Divya

Published in International Journal of Business and Economics Research (Volume 3, Issue 3)

Received: 11 June 2014 Accepted: 24 June 2014 Published: 30 June 2014

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Does Economic Growth Promote Exports of a country or do exports lead to a higher growth? This paper tries to answer this question in the context of India, using a three step procedure of first conducting a Vector Auto Regression (VAR) analysis followed by a Granger Causality Test and an Impulse Response Function. Taking yearly data from 1969-2012, we find that growth of exports depends positively on growth of GDP with a year lag. Robustness checks show consistent VAR Results. Further the Granger Causality Test determines that GDP Growth causes Export growth in India. Finally Impulse Response Functions generated show that there are much higher responses of export through a change in GDP. So unanimously we find that India backs the theory of Growth Led Exports.

Published in	International Journal of Business and Economics Research (Volume 3, Issue 3)
DOI	10.11648/j.ijber.20140303.13
Page(s)	135-139
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Exports of India, Growth Led Exports, Vector Auto Regression, Granger Causality, Impulse Response Functions

References

[1]	Dalia Marin (1992), “Is the Export-Led Growth Hypothesis Valid for Industrialized Countries?” The Review of Economics and Statistics, Vol.74, No. 4 (November, 1992), pp.678-688.
[2]	Dhawan, U., and B. Biswal (1999), ‘Re-examining Export Led Growth Hypo-thesis: a Multivariate Cointegration analysis for India’, Applied Economics, 31: 525-30.
[3]	Dickey, D. A. and W. A. Fuller (1979), ‘Distribution of the Estimators for Autore-gressive Time Series with a Unit Root’, Journal of the American Statistical Association, 74: 427-31.
[4]	Dodaro, S. (1993), ‘Comparative Advantage, Trade and Growth: Export-Led Growth Revisited’, World Development, 19(9): 1153-65.
[5]	Granger, C. W. J. (1969), ‘Investi-gating Causal Relations by Econometric Models and Cross-Spectral Methods’, Econometrica, 37: 424-38.
[6]	Jung, W. S., and P. J. Marshall (1985), ‘Exports, Growth and Causality in Develop-ing Countries’, Journal of Development Economics, 18: 1-12.
[7]	Kaldor N (1967), “Strategic Factors in Economic Development”, New York State School of Industrial and Labor Relations, Ithaca, Cornell University, New York.
[8]	Krugman P R (1984), “Import Protection as Export Promotion”, in H Kierzkowski (Ed.), Monopolistic Competition in International Trade, Oxford Uni-versity Press, Oxford.
[9]	Mallick, S. K. (1996), Causality between exports and economic growth in India: Evidence from Cointegration based Error-Correction Model, Indian Journal of Economics, 76 (302), 307-320.
[10]	Mishra, P. K. (2011) : The dynamics of relationship between exports and economic growth in India, International Journal of Economic Sciences and Applied Research, ISSN 1791-3373, Vol. 4, Iss. 2, pp. 53-70.
[11]	Nain, Md. Zulquar ;Ahmad, Wasim, “Export-led Hypothesis in Indian : Some Further Evidences IUP Journal of Monetary Economics, Aug 01, 2010; Vol. 8, No. 3, p. 69-82
[12]	Narayan Chandra Pradhan (2010), Reserve Bank of India Occupational papers. Vol. 31, No.3.
[13]	Nidugala, G K. (2001), ‘Exports and Economic Growth in India: An Empirical Investigation’, Indian Economic Journal, 47(3): 67-78.
[14]	R, Werner Kristjanpoller; Olson, Josephine E. “Economic Growth in Latin American Countries: Is it Based on Export-Led or Import-Led Growth?” Emerging Markets Finance & Trade, Jan 02, 2014; Vol. 50, p. 6-20
[15]	Walter Enders, Applied Econometric Time Series, 3rd Edi-tion.
[16]	Wojciech W. Charemza and Derek F. Deadman, New Directions in Econometric Prac-tice, 2nd Edition.

Cite This Article

Plain Text BibTeX RIS

APA Style

Mukherji Ronit, Pandey Divya. (2014). The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India. International Journal of Business and Economics Research, 3(3), 135-139. https://doi.org/10.11648/j.ijber.20140303.13

Copy | Download

ACS Style

Mukherji Ronit; Pandey Divya. The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India. Int. J. Bus. Econ. Res. 2014, 3(3), 135-139. doi: 10.11648/j.ijber.20140303.13

Copy | Download

AMA Style

Mukherji Ronit, Pandey Divya. The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India. Int J Bus Econ Res. 2014;3(3):135-139. doi: 10.11648/j.ijber.20140303.13

Copy | Download

@article{10.11648/j.ijber.20140303.13,
  author = {Mukherji Ronit and Pandey Divya},
  title = {The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India},
  journal = {International Journal of Business and Economics Research},
  volume = {3},
  number = {3},
  pages = {135-139},
  doi = {10.11648/j.ijber.20140303.13},
  url = {https://doi.org/10.11648/j.ijber.20140303.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20140303.13},
  abstract = {Does Economic Growth Promote Exports of a country or do exports lead to a higher growth? This paper tries to answer this question in the context of India, using a three step procedure of first conducting a Vector Auto Regression (VAR) analysis followed by a Granger Causality Test and an Impulse Response Function. Taking yearly data from 1969-2012, we find that growth of exports depends positively on growth of GDP with a year lag. Robustness checks show consistent VAR Results. Further the Granger Causality Test determines that GDP Growth causes Export growth in India. Finally Impulse Response Functions generated show that there are much higher responses of export through a change in GDP. So unanimously we find that India backs the theory of Growth Led Exports.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India
AU  - Mukherji Ronit
AU  - Pandey Divya
Y1  - 2014/06/30
PY  - 2014
N1  - https://doi.org/10.11648/j.ijber.20140303.13
DO  - 10.11648/j.ijber.20140303.13
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 135
EP  - 139
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20140303.13
AB  - Does Economic Growth Promote Exports of a country or do exports lead to a higher growth? This paper tries to answer this question in the context of India, using a three step procedure of first conducting a Vector Auto Regression (VAR) analysis followed by a Granger Causality Test and an Impulse Response Function. Taking yearly data from 1969-2012, we find that growth of exports depends positively on growth of GDP with a year lag. Robustness checks show consistent VAR Results. Further the Granger Causality Test determines that GDP Growth causes Export growth in India. Finally Impulse Response Functions generated show that there are much higher responses of export through a change in GDP. So unanimously we find that India backs the theory of Growth Led Exports.
VL  - 3
IS  - 3
ER  -

Copy | Download

Author Information

Mukherji Ronit

M.Sc Economics, University Of Warwick, Coventry, United Kingdom
Pandey Divya

M.Sc Economics and International Financial Economics, University of Warwick, Coventry, United Kingdom

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Mukherji Ronit, Pandey Divya. (2014). The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India. International Journal of Business and Economics Research, 3(3), 135-139. https://doi.org/10.11648/j.ijber.20140303.13

Copy | Download

ACS Style

Mukherji Ronit; Pandey Divya. The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India. Int. J. Bus. Econ. Res. 2014, 3(3), 135-139. doi: 10.11648/j.ijber.20140303.13

Copy | Download

AMA Style

Mukherji Ronit, Pandey Divya. The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India. Int J Bus Econ Res. 2014;3(3):135-139. doi: 10.11648/j.ijber.20140303.13

Copy | Download

@article{10.11648/j.ijber.20140303.13,
  author = {Mukherji Ronit and Pandey Divya},
  title = {The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India},
  journal = {International Journal of Business and Economics Research},
  volume = {3},
  number = {3},
  pages = {135-139},
  doi = {10.11648/j.ijber.20140303.13},
  url = {https://doi.org/10.11648/j.ijber.20140303.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20140303.13},
  abstract = {Does Economic Growth Promote Exports of a country or do exports lead to a higher growth? This paper tries to answer this question in the context of India, using a three step procedure of first conducting a Vector Auto Regression (VAR) analysis followed by a Granger Causality Test and an Impulse Response Function. Taking yearly data from 1969-2012, we find that growth of exports depends positively on growth of GDP with a year lag. Robustness checks show consistent VAR Results. Further the Granger Causality Test determines that GDP Growth causes Export growth in India. Finally Impulse Response Functions generated show that there are much higher responses of export through a change in GDP. So unanimously we find that India backs the theory of Growth Led Exports.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - The Relationship between the Growth of Exports and Growth of Gross Domestic Product of India
AU  - Mukherji Ronit
AU  - Pandey Divya
Y1  - 2014/06/30
PY  - 2014
N1  - https://doi.org/10.11648/j.ijber.20140303.13
DO  - 10.11648/j.ijber.20140303.13
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 135
EP  - 139
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20140303.13
AB  - Does Economic Growth Promote Exports of a country or do exports lead to a higher growth? This paper tries to answer this question in the context of India, using a three step procedure of first conducting a Vector Auto Regression (VAR) analysis followed by a Granger Causality Test and an Impulse Response Function. Taking yearly data from 1969-2012, we find that growth of exports depends positively on growth of GDP with a year lag. Robustness checks show consistent VAR Results. Further the Granger Causality Test determines that GDP Growth causes Export growth in India. Finally Impulse Response Functions generated show that there are much higher responses of export through a change in GDP. So unanimously we find that India backs the theory of Growth Led Exports.
VL  - 3
IS  - 3
ER  -

Copy | Download