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Financial development is a multidimensional process. Over the years with the invention of various new products and services, the financial sector (both financial institutions and financial markets) across the globe has significantly evolved. The endeavor in this article is to investigate the relationship between financial development and economic growth in India for the period 1980–2017. To do so, it employs principal component analysis (PCA) to construct a financial development index, which measures the financial depth of the Indian economy. Using the autoregressive distributed lag (ARDL) and error correction model (ECM), the study estimates a positive effect of financial development on economic growth in the long run and the short run, respectively. In addition, the empirical estimates posit a bidirectional relationship between financial development and economic growth. The uniqueness of this study lies in that it unravels a unidirectional relationship between the stock market and economic growth. The study, however, finds that appropriate liberalization policies spur economic growth in India. [ABSTRACT FROM AUTHOR]

Financial inclusion is a multi-dimensional concept with heterogeneous views prevailing across the globe. The motto of financial inclusion is to provide affordable financial services to all sections of society to improve their standard of living. This is an integral part of economic growth as it not only assures financial sector development but also spreads affordable financial services for the betterment of each section of the society. Broadly, it is the process of allocation of the financial services to the weaker section of the society at an affordable cost. The motivation of this study is to examine the effect of financial inclusion on economic growth in India over the 1980 to 2014 period. The present study uses annual time series data on number of deposit and credit account from scheduled commercial banks in proportion to 1,000 adults, number of bank branches in proportion to 1,000 adults, and number of bank employees as the ratio of bank branches, amounts of deposits and credits as ratio of GDP collected from Basic Statistical Returns, RBI. Data for other macroeconomic controls like inflation, total trade, total secondary school enrollment (as a proxy for human capital) and government expenditure are collected from World development Indicators. The study employs Principal Component Analysis (PCA) to construct a financial inclusion index which measures the financial access in the Indian economy. Using the Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM), the study finds a positive impact of financial inclusion on economic growth both in the long run and short run. In addition, the empirical estimates posit a unidirectional relationship between financial inclusion and economic growth. Moreover, this study reports that financial liberalization policy has contributed to the economic growth in India. Our estimates suggest that the most important task for the government of India is to improve the efficiency of financial institutions, which will simultaneously stimulate financial inclusion as well as economic growth. [ABSTRACT FROM AUTHOR]

At present stock return is significantly related to other global stock markets. The present paper empirically investigates the short run and long run equilibrium relationship between the stock market of India, Japan Hong Kong, Singapore, Malaysia, China, and Australia monthly data during January 1995 to December 2013. Researcher employs correlation test, multivariate cointegration framework, Vector Auto Regressive error-correction model and Granger causality test with reference to financial up evils in Asia and world viz., Asian crisis (1997/98), financial crisis (2008) Inflation conditions, Natural disasters, financial up evils etc. of long run relationship. Results find that the Indian stock market return is significantly cointegrated with long run and short run situations/ causalities in Asian Stock returns. [ABSTRACT FROM AUTHOR]

Time series weekly pricesof Indian shrimp during the period 2007–08 to 2016–17 were analyzed to understand price transmission in trade. Johansen's tests revealed cointegration between export and import prices of frozen shrimp to the American and Japanese markets from India.Joint F-testshowedasymmetric price transmission for only export price of Penaeus monodon (larger size)to import price of P. monodon (larger size), while import prices of P. monodon (smaller size), P. vannamei (larger size)and P. vannamei (smaller size)to Japan were found to be symmetric. Price transmission to USA were found to symmetric except for export price of P. monodon (LS)to import price of P. monodon (LS), while import price of P. monodon (SS), P. vannamei of larger and smaller sizes were found to be asymmetric.Increase in export prices led to rapid decline in imports while decline in export prices resulted inrelativelyslower increase in imports. Price adjustment to equilibrium was faster in USA than Japanese market. The study found that Indian frozen shrimp prices were well integrated among the countries viz. India, USA and Japan. But reasons for asymmetric price transmission in India's shrimp export markets may be attributed to lack of uniformity in supply, weak infrastructure, price information gaps, the operation of numerous traders in the existing marketing system. Structural imbalances in trade arising from foreign trade policy, international financial markets and supply chain inefficiencies need to be ironed out. • Shrimp contributes 66 % in value and 39 % in quantity in total seafood exports from India. • Indian frozen shrimp prices were well integrated among the countries viz. India, USA and Japan. • Supply constraints, disconnects in information flow through and weak trade structure contribute to asymptotic price transmission. • Foreign trade policy, international financial markets and supply chain efficiencies need concerted and constant attention. [ABSTRACT FROM AUTHOR]

Notable accomplishments in export have made India's software sector conspicuous. This paper attempts to discuss the determinants of software exports from India. The study notes that-besides dynamic elements of economic development across the world-the policy measures and actions of the Indian government have played proactive and facilitating roles in the growth of the software sector. The study uses the autoregressive distributed lag (ARDL) approach to estimate the impact of various explanatory variables on software exports from India. Since causality is found running in both directions for many variables, the study attempts to examine the determinants of software exports from India through the regression equation in first difference. The results suggest that changes in openness index, human capital, and the GDP of high-income OECD countries have exercised positive impact on change in software exports from India. The study finds a stable long run relationship among variables. [ABSTRACT FROM AUTHOR]

In the present paper, horizontal and vertical integration was carried out on the wholesale and retail prices of wheat in the major markets of India. On confirming cointegration between the wholesale and retail prices of wheat in all needs, the vector error correction model (VECM) was applied to find the speed of adjustment in the corresponding price channel. The results revealed that price signals are transmitted across regions, indicating that price changes in one market are consistently related to price changes in markets and can influence the prices in other markets. In addition to studying cointegration, threshold autoregressive (TAR) and Momentum TAR (MTAR) models were applied to test for asymmetric cointegration. Hasen and Seo's test was used to test for the presence of threshold cointegration. It revealed a significant presence of asymmetric and nonlinear cointegration in many markets. Accordingly, a threshold VECM (TVECM) model with two regimes was applied. The results indicate that the retail price significantly responds to the deviations from the long-run equilibrium compared to the wholesale price. [ABSTRACT FROM AUTHOR]

This article examines the short-run and long-run causal relationship between energy consumption and output in six non-OECD Asian developing countries. Standard time series econometrics is used for this purpose. Based on cointegration and vector error correction modeling, the empirical result shows a bi-directional causality between energy consumption and income in Malaysia, while a unidirectional causality from output to energy consumption in China and Thailand and energy consumption to output in India and Pakistan. Bangladesh remains as an energy neutral economy confirming the fact that it is one of the lowest energy consuming countries in Asia. Both the generalized variance decompositions and the impulse response functions confirm the direction of causality in these countries. These findings have important policy implications for concerned countries. Countries like China and Thailand may contribute to the fight against global warming directly implementing energy conservation measures whereas India and Pakistan may focus on technological developments and mitigation policies. For Malaysia, a balanced combination of alternative policies seems to be appropriate. [ABSTRACT FROM AUTHOR]

This study estimates and compares the competing optimising and non-optimising balance of trade models using Indian data. The results obtained from the optimising model suggest that the prices relative to user cost of capital and the real wealth lead to a deterioration, while the real capital stock results in an improvement in trade balance. The estimates of conventional non-optimising balance of trade model show the significant effect of domestic income and real exchange rate and the insignificant effect of world income on the balance of trade. The error correction models reinforce the long run estimates and show the significant effect of lagged equilibria on the balance of trade. The non-nested hypothesis tests provide mixed evidence for the preference of one model over the other. The J test suggests that the optimising model outperforms the non-optimising model, while the F test shows that both these models are acceptable in explaining the balance of trade. [ABSTRACT FROM AUTHOR]

This study estimates the balance of trade model similar to Rose (1991) to test the J-curve hypothesis and analyse the effect of conditional exchange rate volatility on the balance of trade in India. The model is estimated on quarterly data from 1975:02 to 1996:03 and the exchange rate is measured alternatively in terms of the trade and export weighted real effective exchange rate. The model variables are tied together in a long run equilibrium relationship. The study does not find any evidence for the presence of the J-curve effect in the balance of trade. The study finds the presence of weak ARCH but strong GARCH effects in the exchange rate series. But this exchange rate volatility does not play any significant role in affecting the balance of trade in India. [ABSTRACT FROM AUTHOR]

The relationship between national income growth and the environment of 14 Asian economies over a 50 year period is examined using the Environmental Kuznets Curve (EKC) hypothesis. Ecological Footprint (EF) measures environmental impacts and gross domestic product (GDP) measures economic growth. It is hypothesised that increased rates of economic growth come at a cost to the natural environment. The EKC hypothesis has been mainly tested in the literature by cross-sectional or panel data methods. In this study, it is tested using time series analysis through initially examining the relationship between EF and GDP using linear, quadratic and cubic estimating OLS regression functions. In the second stage, the long-run relationship between EF and GDP is investigated using an augmented error correction trend model. There is a statistically significant cointegrated long-run relationship between the variables in most of the countries. The EKC hypothesis is supported in the case of India, Nepal, Malaysia and Pakistan with the other countries exhibiting a positive linear relationship between the two variables. Almost all error correction terms are correct in sign and significance that implies that some percentage of disequilibria in EF in the previous year adjusts back to the long-run equilibrium in the current year. Based on the long-run relationship, it is apparent that rapid economic growth has had an impact on the environment and the ecosystems of these countries over the last 50 years. Despite that, until now, not many of them have taken sufficient steps to reduce their EF or to improve their bioproductive capacity.