An Empirical Investigation of the Disaggregated Import Demand Function: Non-linear ARDL Framework
| Published date | 01 May 2021 |
| Date | 01 May 2021 |
| DOI | 10.1177/0015732521995163 |
| Subject Matter | Articles |
An Empirical
Investigation of the
Disaggregated Import
Demand Function:
Non-linear ARDL
Framework
Khyati Kathuria1 and Nand Kumar1
Abstract
The article estimates the disaggregated import demand function for India using
annual time series data for the period 1995–2017. The empirical results reveal
strong evidence of long-run stable relationship among the variables considered in
the study. The disaggregated import demand function is estimated for India using
linear and non-linear ARDL model. The estimated linear ARDL model shows that
gross capital formation, exports and relative prices affect import demand posi-
tively and significantly, both in the short and long run. While the impact of final
consumption expenditure was found to be insignificant in the short run, it affects
import demand significantly and positively in the long run. On the other hand, the
result of the non-linear ARDL model shows the evidence of asymmetry in the
impact of relative prices (positive and negative changes) on import demand, both
in the short and long run.
JEL Codes: F41, B17, B41, C51
Keywords
Marshall–Lerner condition, import demand, exports, non-linear ARDL, bounds
test, cointegration
Article
1 Department of Humanities, Delhi Technological University, Delhi, India.
Corresponding author:
Nand Kumar, Department of Humanities, Delhi Technological University, Delhi 110042, India.
E-mail: nandkumar@dce.ac.in
Foreign Trade Review
56(2) 197–205, 2021
© 2021 Indian Institute of
Foreign Trade
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DOI: 10.1177/0015732521995163
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