 Investment function and the role of export: The case of India's manufacturing sectorZico Dasgupta Structural Change and Economic Dynamics, 2022, vol. 63, issue C, 79-90 Abstract: This paper examines the relation between investment and exports through a Kaleckian model and highlights the possibility of export-induced growth process despite deterioration in trade balance. The stimulating role of exports is analysed through what is termed as a structurally-biased investment function where domestic demand and exports have different effects on investment rate. There are at least two central features of this investment function. Firstly, exports stimulate growth through the investment channel independent of the direction of change in trade balance. Secondly, in contrast to the Bhaduri-Marglin type investment functions, the sign of profit share coefficient in investment function becomes ambiguous. The structurally-biased investment function is tested and found to be valid for the registered manufacturing sector in India by conducting a panel-data exercise. The coefficient for profit share is found to be statistically insignificant after controlling for the effect of exogenous changes in exports. Keywords: Investment function; Export-led; India's growth; Kaleckian open-economy model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:63:y:2022:i:c:p:79-90 DOI: 10.1016/j.strueco.2022.09.004 Access Statistics for this article Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen More articles in Structural Change and Economic Dynamics from Elsevier |
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