India's Growth Spillovers to South Asia
IMF Working Papers, February 1, 2012
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Bibliographic details
- Authors: Iyabo Masha, Ding Ding
- Published: February 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781463937744.001
Summary and key finding
- This study investigates the role of India's economy in explaining the observed growth in South Asia, taking into consideration other sources of growth endogenous to the countries in the region.
- A review of key variables indicates that India's bilateral trade and financial linkages with South Asian countries (SAC) are relatively weak.
- The paper analyses spillover effects by focusing on growth more generally with India's growth as an explanatory variable.
- The results of the panel growth regressions suggest that India's growth has good explanatory power for growth in other SAC after 1995.
Methodology and scope
- Empirical approach: panel growth regressions using India's growth as an explanatory variable for growth in other South Asian countries.
- Temporal note: the main explanatory relationship is identified as holding after 1995.
- Linkage assessment: bilateral trade and financial linkages between India and SAC are characterized as relatively weak, motivating the focus on general growth spillovers rather than direct trade/financial transmission mechanisms.
Subjects and keywords
- Subject: Balance of payments, Exports, External debt, Foreign direct investment, Imports, International trade, Trade balance
- Keywords: Africa, aggregate FDI outflow, ASEAN-China Free Trade Area, Asia and Pacific, China-ASEAN trade, East Asia, economy, Exports, Foreign direct investment, growth linkages, growth spillover, Imports, India, India's growth, regional integration, South Asia, South Asian country, Southern Africa, spillover impact, Spillovers, trade, Trade balance, trade restrictiveness, transformation Europe, WP