Author(s):
1. Ghulam Mustafa:
Department of Economics, University of Jammu, Jammu and Kashmir, India
2. Aroon Sharma:
Department of Economics, University of Jammu, Jammu and Kashmir, India
Abstract:
This study empirically investigates the dynamic relationship between trade openness and economic growth for India in a multivariate framework. The study has used Johansen cointegration test and Granger Causality test in Vector Error Correction Model (VECM) framework to examine the export-led growth hypothesis, import-led growth hypothesis, and tradeled growth hypothesis. The results show that the direction of causality runs from exports to economic growth, imports to economic growth, and trade openness to economic growth. The study also found a bi-directional causality between foreign direct investment and economic growth. Therefore, it is suggested that the policymakers should adopt policies towards further trade liberalization and should focus both on export promotion and export diversification strategy and improve the investment climate and attract investments from both domestic and foreign investors to sustain economic growth in the long run.
Page(s):
603-609
DOI:
DOI not available
Published:
Journal: Science International, Volume: 34, Issue: 6, Year: 2022
Keywords:
economic growth
,
Causality
,
Exports
,
trade openness
,
Imports
References:
References are not available for this document.
Citations
Citations are not available for this document.