The Effects of Capital Formation on Economic Growth in India: Evidence from ARDL-bound Testing Approach-Reference-Cited by-同舟云学术

The Effects of Capital Formation on Economic Growth in India: Evidence from ARDL-bound Testing Approach

Published:2016-10-25 Issue:6 Volume:17 Page:1388-1400
ISSN:0972-1509
Container-title:Global Business Review
language:en
Short-container-title:Global Business Review

Author:

Bal Debi Prasad¹,Dash Devi Prasad²,Subhasish Bibhudutta³

Affiliation:

1. Department of Humanities and Social Sciences, NIT Sikkim, India

2. Research Scholar, Department of Humanities and Social Sciences, Indian Institute of Technology, Ropar, Punjab, India.

3. Senior Research Analyst, Markets & Markets, Pune, India.

Abstract

This article examines the impact of capital formation on economic growth in India covering the period from 1970 to 2012. This paper traces a long-run equilibrium relation between capital formation and economic growth and other control variables by using autoregressive distributed lag (ARDL) model. The error correction (ECM) model shows that the capital formation, trade openness, exchange rate and total factor productivity positively affect the economic growth and the inflation negatively affects the economic growth in the short run. It is recommended that government increases the level of capital formation in order to achieve a higher level of economic growth.

Publisher

SAGE Publications

Subject

Business and International Management

Link

http://journals.sagepub.com/doi/pdf/10.1177/0972150916660403

Reference32 articles.

1. Social capital vs institutions in the growth process

2. Is public expenditure productive?

3. Globalization, Policy Reforms and Productivity Growth in Developing Countries: Evidence from Sri Lanka

4. Error-correction Mechanism Tests for Cointegration in a Single-equation Framework

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