Does infrastructure increase exports and reduce trade deficit? Evidence from selected South Asian countries using a new Global Infrastructure Index

Faheem Ur Rehman (), Abul Ala Noman () and Yibing Ding ()
Additional contact information
Faheem Ur Rehman: Jilin University
Abul Ala Noman: Kohat University of Science and Technology
Yibing Ding: Kohat University of Science and Technology

Journal of Economic Structures, 2020, vol. 9, issue 1, 1-23

Abstract: Abstract This study investigates the short- and long-run impact of infrastructure on export and trade deficit in selected South Asian countries during 1990–2017 by using Pooled Mean Group (PMG) estimator and cointegration techniques like Pedroni and Kao test. The empirical results of PMG approach confirmed the existence of significant long-run impact of aggregate and sub-indices of infrastructure (i.e., transport, telecommunication, energy and financial sector) on export and trade deficit. The findings suggested that infrastructure positively promotes exports while negatively affecting trade deficit. The relationship between infrastructure and export is worthy bulletin for South Asian economies to encourage the quantity of exports and catch-up on established economies. The control variables of exchange rate, human capital, per capita GDP and institutional quality enhance exports and retard trade deficit significantly in the long run. Furthermore, the Pedroni and Kao test indicates strong evidence of cointegration in selected variables. Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) support robust and consistent results to the main model of this study. Furthermore, the study recommended that in long run aggregate and sub-indices of infrastructure promote exports and decrease trade deficit in selected South Asian economies.

Keywords: Infrastructure; Export; Trade deficit; Cointegration; South Asia (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://link.springer.com/10.1186/s40008-020-0183-x Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jecstr:v:9:y:2020:i:1:d:10.1186_s40008-020-0183-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40008

DOI: 10.1186/s40008-020-0183-x

Access Statistics for this article

Journal of Economic Structures is currently edited by Shigemi Kagawa and Kazuhiko Nishimura

More articles in Journal of Economic Structures from Springer, Pan-Pacific Association of Input-Output Studies (PAPAIOS) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().