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An Inquiry into the Determinants of the Exports of China and India

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  • Richard S. Eckaus

Abstract

Regression analysis is used to tease out the relative significance of influences on the supply and demand for the exports of China and India. On the supply side, the value‐added tax in China has discouraged export supply. The elimination of the rebate on those taxes will discourage exports. Higher wages discourage exports, but the share of exports by foreign invested enterprise is a positive influence, as is a higher share of value added in output and greater experience in exporting. On the demand side, exports depend in part on aggregate income levels in importing countries. Relative wages have been more important than exchange rates in determining the demands for Chinese and Indian exports. This evidence does not support the pressures for a devaluation of the RMB. There is also evidence of the positive significance of the accustomization of purchasers to buying Chinese exports.

Suggested Citation

  • Richard S. Eckaus, 2008. "An Inquiry into the Determinants of the Exports of China and India," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(5), pages 1-15, September.
    • Handle: RePEc:bla:chinae:v:16:y:2008:i:5:p:1-15
    DOI: 10.1111/j.1749-124X.2008.00126.x
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    References listed on IDEAS

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    1. Grossman, Gene M., 1980. "Border tax adjustments: Do they distort trade?," Journal of International Economics, Elsevier, vol. 10(1), pages 117-128, February.
    2. Barry Eichengreen & Yeongseop Rhee & Hui Tong, 2007. "China and the Exports of Other Asian Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(2), pages 201-226, July.
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    Cited by:

    1. Vikas Gautam & Suresh K G & Aviral Kumar Tiwari, 2013. "Impact Of Real Exchange Rates On Exports Of Agricultural Commodities: Evidence From India," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 11, pages 46-58, June.
    2. haider, salman & Adil, Masudul hasan, 2017. "An Analysis of Impact of Exchange Rate Volatility on the Indian Manufacturing Exports," MPRA Paper 87839, University Library of Munich, Germany, revised 10 Nov 2017.

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