Agricultural Export and Economic Growth in India: A cointegeration Analysis

This study investigates short run and long run relationship between growth of agricultural export and economic growth in India using Error Correction Model and Granger causality during 1980–2010. The result shows that the growth of agricultural export and economic growth are cointegrated. So there is a long run relationship between these variables. The result of Granger causality test suggests that the direction of causality is from economic growth to growth of agricultural export since the estimated F is significant at 5% level. But there is no reverse causation from growth of agricultural export to economic growth, since the F value is statistically insignificant. Also shows that the coefficient of ECM term reveals that the adjustment process was very fast; otherwise 95.5% of the previous year's disequilibrium from its equilibrium path will be corrected in the current year.