Interactions of services export, financial development and growth: evidence from India

Shujaat Naeem Azmi () and Shakeb Akhtar ()
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Shujaat Naeem Azmi: Ala-Too International University
Shakeb Akhtar: Woxsen University

Quality & Quantity: International Journal of Methodology, 2023, vol. 57, issue 5, No 37, 4709-4724

Abstract: Abstract The rising significance of services export in international trade brings to the fore discussions on its linkage with financial development and growth. In this context, the present study is undertaken to understand the role of financial development and growth in determining services export and further examine the reverse causality hypothesis among the variables. The study uses annual data from 1980 to 2018 from India. It employs real services export and GDP to control for price variations and financial development index to capture the extent of financial development in India. The researchers have opted for Autoregressive Distributed Lag framework to determine the existence of a long run equilibrium between the variables along with the short run dynamics. The results from bounds test suggest that the variables are cointegrated. However, in the short run only growth is significant. These results provide incentives for policy makers to promulgate policies aimed at enhancing various aspects of financial development and domestic production, for acceleration of services export growth.

Keywords: Services export; Trade; Financial development; ARDL; Cointegration (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11135-022-01566-8

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