( ISSN 2277 - 9809 (online) ISSN 2348 - 9359 (Print) ) New DOI : 10.32804/IRJMSH

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EMPIRICAL VERIFICATION OF THE MARSHALL-LERNER CONDITION IN INDIA AND CHINA (1991- 2013): A COMPARATIVE STUDY

    2 Author(s):  PROF.( DR.) GARGI BANDYOPADHYAY , TRIPTI

Vol -  6, Issue- 1 ,         Page(s) : 305 - 318  (2015 ) DOI : https://doi.org/10.32804/IRJMSH

Abstract

The purpose of this study is the comparative analysis of the Marshall-Lerner Condition in India and China for the time period 1991-2013. Also, to show an empirical verification of the Marshall – Lerner condition. Five variables are taken in this study namely; Exports, Imports, GNI, Exchange Rate and the World Income .The data is collected annually from the World Bank database. All these variables are tested for stationarity and then for cointegration via SAS and finally OLS technique has been implied in order to find the import and export elasticity. The condition is tested separately for India and China and then the comparisons are drawn. The results show that this condition is satisfied in both the countries but there are still certain important differences in the scenarios in both the countries which led to the justification of the Marshall-Lerner condition. All these findings are supported with the empirical analysis using the available data. This study will be helpful to determine the trends in the trade and future research can be done to suggest the various changes which will help the country to develop international trade.

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