The Role of Real Exchange Rate in India’s Service Export: Do Remittances Inflows Matter in Post Liberalization-Era?

IF 2.5 Q2 ECONOMICS
Shreya Pal, Mantu Kumar Mahalik
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Abstract

This study assesses the effects of real exchange rate and remittance inflows on India's total service exports, comprising traditional and modern service exports, spanning the annual data from 1990 to 2020. The control variables for the service export function include developments in the banking sector and the stock market and net inflows of foreign direct investment. The ARDL model is the estimating technique of the present study. The real exchange rate has an adverse effect on total, traditional, and modern service exports, according to the long-run outcomes of the ARDL model. Remittance inflows are interestingly shown to support modern service exports while impeding total and traditional service exports. The growth of the banking sector is beneficial for traditional and total service exports, but it has a negative impact on modern service exports. All service exports are benefited by stock market development; however, net FDI inflows negatively impact all forms of service exports. Based on these results, the policymakers in India are advised to maximize the effective utilization of remittance inflows in traditional service exports. Additionally, proactive intervention by the central bank is recommended to mitigate the adverse effects of the real exchange rate on traditional and modern service exports. This study also provides valuable insights for the policymakers and practitioners seeking to enhance India's service export performance while navigating the complexities of real exchange rates, remittance inflows, and financial factors.

Abstract Image

实际汇率在印度服务出口中的作用:汇款流入在后自由化时代是否重要?
本研究评估了实际汇率和汇款流入对印度服务出口总额(包括传统和现代服务出口)的影响,年度数据跨度为 1990 年至 2020 年。服务出口函数的控制变量包括银行业和股票市场的发展以及外国直接投资的净流入。本研究采用 ARDL 模型进行估计。根据 ARDL 模型的长期结果,实际汇率对总出口、传统出口和现代服务出口都有不利影响。有趣的是,汇款流入支持了现代服务出口,同时阻碍了服务出口总额和传统服务出口。银行业的增长有利于传统服务出口和总体服务出口,但对现代服务出口有负面影响。股票市场的发展有利于所有服务出口;然而,外国直接投资净流入对所有形式的服务出口都有负面影响。基于这些结果,建议印度的政策制定者在传统服务出口中最大限度地有效利用汇款流入。此外,建议中央银行进行积极干预,以减轻实际汇率对传统和现代服务出口的不利影响。本研究还为决策者和从业人员提供了宝贵的见解,帮助他们在驾驭实际汇率、汇款流入和金融因素的复杂性的同时,提高印度的服务出口绩效。
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来源期刊
CiteScore
3.00
自引率
0.00%
发文量
34
期刊介绍: The current remarkable growth in the Asia-Pacific financial markets is certain to continue. These markets are expected to play a further important role in the world capital markets for investment and risk management. In accordance with this development, Asia-Pacific Financial Markets (formerly Financial Engineering and the Japanese Markets), the official journal of the Japanese Association of Financial Econometrics and Engineering (JAFEE), is expected to provide an international forum for researchers and practitioners in academia, industry, and government, who engage in empirical and/or theoretical research into the financial markets. We invite submission of quality papers on all aspects of finance and financial engineering. Here we interpret the term ''financial engineering'' broadly enough to cover such topics as financial time series, portfolio analysis, global asset allocation, trading strategy for investment, optimization methods, macro monetary economic analysis and pricing models for various financial assets including derivatives We stress that purely theoretical papers, as well as empirical studies that use Asia-Pacific market data, are welcome. Officially cited as: Asia-Pac Financ Markets
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