The Interrelationship Between Merchandise Trade, Economic Growth and FDI Inflows in India

Mousumi Bhattacharya and Sharad Bhattacharya
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Mousumi Bhattacharya: Army Institute of Management, India

South-Eastern Europe Journal of Economics, 2011, vol. 9, issue 2, 229-244

Abstract: The purpose of the paper is to investigate whether the volume of merchandise trade and FDI inflows influences economic growth. The period of the study is 1996-97:Q1 to 2008-09:Q3. After investigating the stationarity of the variables, cointegration analysis has been conducted followed by VECM analysis and Granger Causality Test. The variables are I(1) processes. While unidirectional causality is observed from merchandise trade to economic growth, feedback causality has been observed between FDI inflows and economic growth.

Keywords: FDI inflows; Multivariate Granger Causality Test; VECM; Co-integration Analysis; Economic growth. (search for similar items in EconPapers)
JEL-codes: F43 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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