Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98275
Authors: 
Sharma, Kishor
Year of Publication: 
2000
Series/Report no.: 
Center Discussion Paper 816
Abstract: 
Export growth in India has been much faster than GDP growth over the past few decades. Several factors appear to have contributed to this phenomenon including foreign direct investment (FDI). However, despite increasing inflows of FDI especially in recent years there has not been any attempt to assess its contribution to India's export performance- one of the channels through which FDI influences growth. Using annual data for 1970-98 we investigate the determinants of export performance in India in a simultaneous equation framework. Results suggest that demand for Indian exports increases when its export prices fall in relation to world prices. Furthermore, the real appreciation of the rupee adversely effects India's exports. Export supply is positively related to the domestic relative price of exports and higher domestic demand reduces export supply. Foreign investment appears to have statistically no significant impact on export performance although the coefficient of FDI has a positive sign.
Subjects: 
Exports
commercial policy
export subsidies
foreign direct investment
exchange rates and India
JEL: 
F1
F13
F14
F21
Document Type: 
Working Paper

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