Economic growth of India: The role of production, trade, and CO2 emission based on the Granger causality

Jeena Ann John; Jayendira P. Sankar; Reem Abbas Abdalla; Stephen Retnamony Chellakan; Saubhagyalaxmi Misra; Gulnar Mulla; Mary Benitta Rani

doi:10.24294/jipd.v8i8.4666

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Economic growth of India: The role of production, trade, and CO2 emission based on the Granger causality

Jeena Ann John

Jayendira P. Sankar

Reem Abbas Abdalla

Stephen Retnamony Chellakan

Saubhagyalaxmi Misra

Gulnar Mulla

Mary Benitta Rani

Journal of Infrastructure Policy and Development 2024, 8(8), 4666; https://doi.org/10.24294/jipd.v8i8.4666

Submitted：18 Feb 2024

Accepted：08 Mar 2024

Published：06 Aug 2024

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Abstract

India’s economic growth is of significant interest due to its expanding Gross Domestic Product (GDP) and global market influence. This study investigates the interplay between production, trade, carbon dioxide (CO₂) emissions, and economic growth in India using Granger causality analysis. Also, the data from 1994 to 2023 were analyzed to explore the relationships among these variables. The results reveal strong positive correlations among production, trade, CO₂ emissions, and GDP, with production showing significant associations with export, import, and GDP. Co-integration tests confirm the presence of a long-term relationship among the variables, suggesting their interconnectedness in shaping India’s economic landscape. Regression analysis indicates that production, export, import, United States (US)-India trade, manufacturing cost of energy, and CO₂ emissions significantly impact GDP. Moreover, the Vector Error Correction Model (VECM) estimation reveals both short-term and long-term dynamics, highlighting the importance of understanding equilibrium and deviations in economic variables. Overall, this study contributes to a better understanding of the complex interactions driving India’s economic growth and sustainability.

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References

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