A TIME SERIES ANALYSIS OF GROSS DOMESTIC CAPITAL FORMATION AND FOREIGN TRADE IN INDIA

Author Name: Rajiv Lochan Jena

Volume/Issue: 02/03

Country: India

DOI NO.: 08.2020-25662434 DOI Link: https://www.doi-ds.org/doilink/09.2021-35289495/UIJIR

Affiliation:

Ph. D Research Scholar, North Orissa University, Odisha, India

ABSTRACT

In this study, we analysis the relationship between exports, imports and gross domestic capital formation in a developing country like India has been investigated using popular time series data. First we calculated stationary of data through Augmented Dickey- Fuller test of unit root test which indicates that all variables are stationary at first difference. There is no co integration found among the variables in Johansen co integration test. That means there is no long run association-ship among the variables. The results of the empirical analysis lead to the conclusion that both exports and imports influence gross capital formation. The results strongly support the unidirectional causation from capital formation to total imports, as well as in case of exports to imports, means causality runs from Gross domestic capital formation to imports and exports to imports.

Key words: Capital Formation, Economic Growth, Exports, Imports, Investment.