Foreign Trade, Human Capital and Economic Growth in India under the Liberalised Trade Regime

Biswajit Maitra and Moutushi Chakraborty

Journal of Asian Economic Integration, 2023, vol. 5, issue 1, 29-50

Abstract: This study revisits trade–growth dynamics in India augmenting the role of human capital for the liberalised trade regime. The autoregressive distributed lag-bounds testing approach finds cointegrating relation of income with the different combinations of export, import, exchange rate, trade openness, education and health dimension of human capital. The long-run and short-run dynamics of such relations confirm that both export and import enhance income growth that testifies export-led and import-led growth premises. Trade openness proves detrimental to growth, while human capital spurs growth. However, the growth gains from the human capital vary across alternative measures of human capital. A battery of diagnostic tests corroborates these inferences robustly. Policy manifestation for trade promotion might be beneficial for higher economic growth in India. JEL Codes: F43, F13, F14, O24

Keywords: Economic growth; human capital; international trade; trade openness; trade liberalisation (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jfasei:v:5:y:2023:i:1:p:29-50

DOI: 10.1177/26316846221147581

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