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Causal relationship between agricultural exports and economic growth: a diagnostic approach

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  • Ankit CHHIKARA

    (Chaudhary Ranbir Singh University, Jind)

  • Laurel PASRICHA

    (Kurukshetra University, Kurukshetra)

Abstract

This study attempts to investigate the causal relationship that exists between agricultural exports and economic growth for the time period starting from 1992-93 to 2018-19. Gross Domestic Product (GDP) has been used as the proxy of the economic growth. The study applied the unit root testing for checking the stationarity of the data which comes out to be integrated at level 2. The study used Johansen co-integration test to understand if there is any co-integration between the two variables of the study i.e. agricultural exports and economic growth. Vector Error Correction Model has been used to know if there is short run or long run causality between them. The results revealed that there is short run causality between the taken variables when GDP is taken as independent and agricultural exports as dependent variable but not vice-versa. Granger-Causality test shows that there is unidirectional causality running from gross domestic product to exports of agricultural products. The study would help in policy formulation in a way that gives boost to economic growth and thus the agricultural exports.

Suggested Citation

  • Ankit CHHIKARA & Laurel PASRICHA, 2021. "Causal relationship between agricultural exports and economic growth: a diagnostic approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(627), S), pages 33-44, Summer.
    • Handle: RePEc:agr:journl:v:2(627):y:2021:i:2(627):p:33-44
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    References listed on IDEAS

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    1. Subrata Ghatak & Stephen Price, 1997. "Export composition and economic growth: Cointegration and causality evidence for India," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(3), pages 538-553, September.
    2. Raju GUNTUKULA, 2018. "Exports, imports and economic growth in India: Evidence from cointegration and causality analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(615), S), pages 221-230, Summer.
    3. P. J. Dawson, 2005. "Agricultural exports and economic growth in less developed countries," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 145-152, September.
    4. P. K. Mishra, 2011. "The Dynamics of Relationship between exports and economic growth in India," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 4(2), pages 53-70, August.
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