A causal investigation of aggregate output fluctuations in India

This article is an attempt to understand the causal factors behind fluctuations in aggregate output. We find an absence of bidirectional causality between the gross domestic product residual and the gross domestic capital formation residual as well as between the GDP residual and the residual of the combined expenditures of the central and state governments, while the causality between the balance of trade residual and GDP residual is weakly unidirectional.Business Cycles; Hodrick-Prescott filter; Granger Causality;

Financial sector de-regulation in Emerging Asia: Focus on foreign bank entry

Over the last decade many emerging Asian economies have been liberalizing their financial sectors, including opening up of their banking systems to foreign competition. This paper examines the extent of de jure and de facto policies in Asia with regard to the introduction of greater foreign competition. To preview the main conclusion, while there has clearly been greater international financial liberalization in the region, Asia lags behind emerging Europe and Latin America when it comes to the relative significance of foreign banks in their respective domestic economies. The paper goes on to discuss possible reasons behind Asia’s relatively cautious approach towards this policy.Financial sector de-regulation; Foreign bank entry; Emerging Asia

A causal investigation of aggregate output fluctuations in India

This article is an attempt to understand the causal factors behind fluctuations in aggregate output. We find an absence of bidirectional causality between the gross domestic product residual and the gross domestic capital formation residual as well as between the GDP residual and the residual of the combined expenditures of the central and state governments, while the causality between the balance of trade residual and GDP residual is weakly unidirectional

A causal investigation of aggregate output fluctuations in India

This article is an attempt to understand the causal factors behind fluctuations in aggregate output. We find an absence of bidirectional causality between the gross domestic product residual and the gross domestic capital formation residual as well as between the GDP residual and the residual of the combined expenditures of the central and state governments, while the causality between the balance of trade residual and GDP residual is weakly unidirectional

Real Effective Exchange Rates and Foreign Direct Investment Inflows: Empirical Evidence from India’s Sub-National Economies

This paper investigates the impact of real effective exchange rates (REER), both in terms of levels and volatility, on foreign direct investment (FDI) inflows for a panel of 35 Indian sub-national economies over the period 2000-2013. In light of the asymmetric distribution of FDI inflows within India, we focus on examining the nexus between FDI inflows at the sub-national level and India’s competitiveness captured by REER. Our empirical analysis reveals that movements in REER have a significant and negative impact on FDI inflows, while REER volatility is found to be inducing FDI. Our results are suggestive that FDI inflows into India are largely domestic market oriented in nature. Purpose: In light of the asymmetric distribution of FDI inflows within India, we focus on examining the nexus between foreign direct investment (FDI) inflows at the sub-national level and India’s competitiveness captured by real effective exchange rates (REER). This paper investigates the impact of REER, both in terms of levels and volatility, on FDI inflows to 35 Indian sub-national economies over the period 2000-2013. Research Methodology: To examine the impact of REER on FDI inflows, we compile a panel dataset for 35 sub-national economies covering the time period 2000 to 2013. We employ panel fixed effects models to explore our relationship of interest between REER and FDI, controlling for other characteristics specific to a sub-national economy.Findings: Our empirical analysis reveals that movements in REER have a significant and negative impact on FDI inflows, while REER volatility is found to be inducing FDI. Our results are suggestive that FDI inflows into India are largely domestic market-oriented in nature. Originality/Value: Considering that India’s FDI inflows exhibit significant concentration patterns among selected regions, we exploit this heterogeneity at the sub-national level to empirically understand the determinants of FDI, with a particular focus on cost competitiveness as captured by REER. The extant literature has not explicitly focused on testing the impact of REER both in terms of its levels and volatility on FDI inflows to India at the sub-national level, especially not at the sub-national level. While admittedly the exchange rate varies only at the national level, the value-addition comes from understanding its interaction with state-varying macroeconomic indicators

The Multi-Fibre Agreement Phase-Out: Efficiency Implications of Textile Firms in India

This paper empirically investigates the implications of unshackling of the global textile trade, following the complete phasing out of the Multi-Fibre Agreement (MFA) in 2005, on the efficiency of firms in the Indian textiles industry. By employing Stochastic Coefficients Frontier Approach, it estimates the overall and input specific efficiency values for 215 sample firms during 1993-94 to 2005-06. Results of the paper show that the average efficiency declined over the years, indicating the presence of inefficiency in using inputs. Given that there is a paucity of empirical studies dealing with efficiency of the Indian textile firms in the light of phasing out of the MFA, this paper seeks to fill such a gap

Financial sector de-regulation in Emerging Asia: Focus on foreign bank entry

Over the last decade many emerging Asian economies have been liberalizing their financial sectors, including opening up of their banking systems to foreign competition. This paper examines the extent of de jure and de facto policies in Asia with regard to the introduction of greater foreign competition. To preview the main conclusion, while there has clearly been greater international financial liberalization in the region, Asia lags behind emerging Europe and Latin America when it comes to the relative significance of foreign banks in their respective domestic economies. The paper goes on to discuss possible reasons behind Asia’s relatively cautious approach towards this policy

Financial sector de-regulation in Emerging Asia: Focus on foreign bank entry

Over the last decade many emerging Asian economies have been liberalizing their financial sectors, including opening up of their banking systems to foreign competition. This paper examines the extent of de jure and de facto policies in Asia with regard to the introduction of greater foreign competition. To preview the main conclusion, while there has clearly been greater international financial liberalization in the region, Asia lags behind emerging Europe and Latin America when it comes to the relative significance of foreign banks in their respective domestic economies. The paper goes on to discuss possible reasons behind Asia’s relatively cautious approach towards this policy

Mapping India-EU tourism flows

CARIM-India: Developing a knowledge base for policymaking on India-EU migrationIndia and the EU have expanded their bilateral economic and investment ties significantly in the last decade or so. As a result of closer ties, the EU has emerged as a very important destination for various types of cross-border flows from India. In addition to the growing movement of professionals and students, there has also been a marked rise in cross-border flows of tourists between India and the EU. Given the economic and strategic significance of promoting tourism flows for fostering bilateral relations, this paper attempts to map the tourism flows between India and a selected few EU countries and also examine their relative significance as destinations or sources. The paper also draws some possible inferences about tourism’s role in facilitating irregular migration.CARIM-India is co-financed by the European University Institute and the European Unio