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An Empirical Analysis of the Aggregate Export Demand Function in Post-Liberalization India

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  • Inoue Takeshi

    (Faculty of Policy Studies, Nanzan University, Seto, Aichi, Japan)

Abstract

This paper focuses on export growth as an engine of growth and, by estimating India’s export demand function, examines whether and to what extent India’s export trend has been affected by external factors, particularly in the post-liberalization period. The empirical results indicate that all estimated coefficients are statistically significant with expected signs and that the absolute value of the coefficient is the largest for the world price, followed by world income and domestic income. Our results reveal that price competitiveness has improved India’s export market. Moreover, the statistically significant world income elasticity suggests that the global economic boom may contribute to an increase in India’s exports, whereas the global recession has likely had an adverse impact on the Indian economy through its trade channel. To ensure that export expansion becomes a stable contributor to economic growth, the Indian government should pursue ongoing diversification in exports in terms of both commodities and markets.

Suggested Citation

  • Inoue Takeshi, 2014. "An Empirical Analysis of the Aggregate Export Demand Function in Post-Liberalization India," Global Economy Journal, De Gruyter, vol. 14(1), pages 79-88, June.
    • Handle: RePEc:bpj:glecon:v:14:y:2014:i:1:p:10:n:3
    DOI: 10.1515/gej-2013-0013
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    2. Didier Yelognisse Alia, 2015. "Geographical Orientation of Export in Manufacturing Sector in Sub-Sahara Africa," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 15(3), pages 337-351, September.
    3. Garg, Bhavesh & Prabheesh, K.P., 2017. "Drivers of India’s current account deficits, with implications for ameliorating them," Journal of Asian Economics, Elsevier, vol. 51(C), pages 23-32.
    4. Prachi Mishra & Devesh Roy, 2016. "India-Us Trade and Investment: Have They Been Up To Potential?," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 16(3), pages 539-567, September.
    5. Prachi Mishra & Devesh Roy, 2016. "India-Us Trade and Investment: Have They Been Up To Potential?," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 16(3), pages 539-567, September.

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