International Journal of Scientific & Technology Research

Home About Us Scope Editorial Board Blog/Latest News Contact Us
10th percentile
Powered by  Scopus
Scopus coverage:
Nov 2018 to May 2020


IJSTR >> Volume 8 - Issue 11, November 2019 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

Reinvestigating Import And Economic Growth Nexus In India: A Cointegration And Causality Test Analysis

[Full Text]



Ashomi Kalita



Import, Economic Growth, Causality, Cointegration, India



The present study aims at investigating the long run cointegration and causal relationship between imports and economic growth in India over the period 1980-2012. The variables which are used are import as a percentage share of GDP (LIMP) and real GDP at factor cost (LGDP). By applying the econometric tests including stability tests, ADF Unit Root Test, Johansen (1991) cointegration test, VECM and Block Exogeneity Wald Test , the study has find the evidence of the existence of long run relationship between import and economic growth and import led growth strategy is applicable in India over the long run. However the study does not find any short run causality between the two and this is not surprising at all since import may not be the source of growth in the short run because imported technology in the form of capital goods takes time to increase the productive capacity of the country and growth does not always be the source of imports. Sometimes, imports may be financed through the borrowing either internal or external or through emigrant remittances etc.



[1] Grossman, G.M. and Helpman, E. (1990a). “Innovation and Economic Growth in the Global Economy”, Cambridge, M.A: MIT Press.
[2] Grossman, G.M. and Helpman. E. (1990b). “Trade, Innovation and Growth”, American Economic Review, Vol.80 (2), p.p.86-91.
[3] Johansen, S. (1991). “Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models”, Econometrica, Vol. 59(6), p.p.1551-1580.
[4] Johansen, S. and Juselius, K. (1990). “Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand for Money”, Oxford Bulletin of Economics and Statistics, Vol. 52(2), p.p.169-210.
[5] Kalita, A.(2018). “A Study on Trade Openness, Economic Growth and Income Inequality in India (1970- 2013)”, Unpublished M.Phil Dissertation
[6] McGraw-Hill Companies, Fourth Edition, West Point, USA.
[7] Rivera Batiz, L-A and Romer, P.M. (1991). “International Trade with Endogenous Technological Change”, European Economic Review, Vol.35, p.p.971-1001.
[8] Romer, Paul M. (1990). “Endogenous Technological Change”, Journal of Political Economy, Vol. 98(5), p.p. 71-102.
[9] Young, A. (1991). “Learning by Doing and Dynamic Effects of International Trade”, Quarterly Journal of Economics,Vol. 106(2), p.p.369-405