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Small Scale Industries and Economic Growth: Empirical Evidence from India during Post Economic Reforms Era

Author

Listed:
  • Surat Singh

    (Chandigarh University)

  • Dalbir Singh

    (MLN College)

Abstract

The present study empirically investigates the causality between Growth and Exports (EXP) by small scale industries in India over the period 1991-2014, the post economic reforms era. In the present study Gross Output (GO) is used as proxy of Economic Growth. The study takes into consideration the recent advances in econometric techniques. The study shows the high degree of correlation between GO and EXP. The variables are tested for stationarity applying Augmented Dickey-Fuller (ADF) test. To determine the cause and effect relationship between GO and EXP, Granger Causality test and Vector autoregression (VAR) model have been used. Granger Causality results suggest that there is unidirectional causality between GO and EXP. The Vector auto regression (VAR) model has explained that there is a strong cause and effect relationship between the variables in the present study.

Suggested Citation

  • Surat Singh & Dalbir Singh, 2017. "Small Scale Industries and Economic Growth: Empirical Evidence from India during Post Economic Reforms Era," Shanlax International Journal of Economics, Shanlax Journals, vol. 6(1), pages 94-102, December.
    • Handle: RePEc:acg:journl:v:6:y:2017:i:1:p:94-102
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    References listed on IDEAS

    as
    1. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    2. Annapurna Dixit & Alok Kumar Pandey, 2011. "SMEs and Economic Growth in India: Cointegration Analysis," The IUP Journal of Financial Economics, IUP Publications, vol. 0(2), pages 41-59, June.
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