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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]

 

AUTHOR(S)

Ashomi Kalita

 

KEYWORDS

Import, Economic Growth, Causality, Cointegration, India

 

ABSTRACT

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.

 

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