Empirical Nexus between Export and Productivity Growth: Evidence from Selected Manufacturing Industries in India
The objective of this paper is to investigate the export-productivity nexus in some selected manufacturing industries in India for the period 1979-80-2008-09. First, it estimates TFP growth by translog index and thereafter capacity adjusted TFP growth has been estimated to eliminate short run cyclical movements .Second, it examines export-productivity nexus by Error Correction Model. The empirical results provide support for a link between export growth and productivity growth. It is evident from the result that short run casuality from export to TFP is prevalent for cement industry and paper industry and reverse short run casuality from TFP to export for aluminium and iron &steel industry and for glass industry, short run casuality is undirectional.The results also indicate that long run causality is bi-directional in the case of cement,iron&steel and paper industries. The result seems to suggest that export generates both significantly short-run and long-run impacts on TFP growth in energy intensive industries in India.
Total factor productivity; export; growth; causality
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