Efficiency of India’s Agricultural Exports

Abstract

This article is an empirical study employing various time-invariant and time-varying specifications of a stochastic gravity model of trade. It enumerates the inefficiency component among the determinants of Indian agricultural export flows to 112 partner countries, over the years 2000–2013. The panel study finds empirical support for high yet decreasing home country inefficiency or ‘behind-the-border’ constraints to trade. Also significance of regional groups ASEAN, SAFTA and Africa shows that trade policy concentrating on developing countries have been successful export policies. Thus, the export efficiency scores help in articulating future policy initiatives for diversification of the country’s exports according to the significance and level of efficiency of partners. Nevertheless, literal interpretations of the efficiency scores are sensitive to the nature of modelling and their specifications.