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We examine the impact of crude oil imports and gold imports on India’s current
account balance (CAB) using linear cointegration techniques for the period 1980-
2017. We find strong evidence in support of a positive and significant impact of
crude oil imports and a negative and significant impact of gold imports on India’s
CAB. It also reveals that...
Contexts in source publication
Context 1
... unit root test results of augmented DickyFuller (ADF, 1979), Phillips-Perron (PP, 1988) and Zivot-Andrews (ZA, 1992) tests, presented in Table 1, reveal the first difference stationary of all variables allowing us for the estimation of combined and bound testing cointegration approach. The confirmation of the existence of cointegration between the variables in Table 2, further motivates us to estimate both the long-run and short-run estimated parameters of the CAB model. The long-run ARDL results in Table 3 show that crude oil imports positively contribute to India's CAB. ...Context 2
... unit root test results of augmented DickyFuller (ADF, 1979), Phillips-Perron (PP, 1988) and Zivot-Andrews (ZA, 1992) tests, presented in Table 1, reveal the first difference stationary of all variables allowing us for the estimation of combined and bound testing cointegration approach. The confirmation of the existence of cointegration between the variables in Table 2, further motivates us to estimate both the long-run and short-run estimated parameters of the CAB model. The long-run ARDL results in Table 3 show that crude oil imports positively contribute to India's CAB. ...Similar publications
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Citations
... The importance of gold in terms of current account balance has been the subject of discussion. Sahoo et al. (2020) analyzed India's current account balance in relation to oil and gold imports by applying linear cointegration approach. The effect of gold imports was significant and negative. ...
The impacts of the gold price, the oil price and the exchange rate on imports are analyzed using a time-varying parameter vector autoregres-sive with stochastic volatility (TVP-VAR-SV) model. The impulse response functions showed that the impact of oil price shocks on imports continued for a short period of time, whereas that of the gold price became more significant and gave rise to long term effects in later periods. The results reveal important implications for policy makers reducing imports, which stimulates a trade deficit in Turkey.
... Arouri et al. (2014) and Nasir et al. (2018) found, via the VAR model, that a rise in oil prices deteriorates the trade balance in India. Similarly, Sahoo et al. (2020) found a negative effect of oil prices on the current account balance, using the autoregressive distributed lag (ARDL) model. The existing studies in India have not investigated the effect of various forms of oil-market shocks on the trade balance. ...
This paper examines the influence of global oil market shocks on India’s aggregate, non-oil, and oil trade balances using the structural vector autoregression model. The impulse response analysis suggests that aggregate and non-oil trade balances deteriorate in response to adverse oil-specific demand shocks, while the oil trade balance improves. Among oil market shocks, only oil-specific demand shocks have a significant impact on all trade balance metrics. This research has crucial policy implications for the Indian economy.
... For example, if the international oil price falls, so will the oil import bill, improving the domestic economy's trade balance. Our findings are consistent with the conclusions drawn by Sahoo, Mallick, and Mahalik (2020), who established that increasing crude oil prices have a detrimental effect on India's current account balance, whereas a decrease in prices improves it in both the short and long run. However, our results contradict the findings of Ahad and Anwer (2021), who demonstrated that a positive shock in oil prices improves the trade balance, while a negative shock worsens it for BRICS countries from 1992 to 2015. ...
... By contrast, negative shock to the exchange rate (an appreciation of domestic currency) has a positive but insignificant impact on the trade balance (a coefficient of 0.148) in the long run. It supports the findings of Sahoo, Mallick, and Mahalik (2020). ...
... This implies that a reduction in the oil price reduces the import bill and thereby improves the trade balance in the short run. Our findings are consistent with the conclusions of Sahoo, Mallick, and Mahalik (2020) and contradict the findings of Ahad and Anwer (2021). Furthermore, the results show that a positive shock to the exchange rate (depreciation of domestic currency) significantly improves the trade balance by reducing imports and increasing exports. ...
Remittances are regarded as an important source of foreign exchange for the majority of low and middle-income countries, and thus have the potential to impact their aggregate economic activities. The current study investigates the impact of remittance inflows and international oil prices on India's trade balance from 1975 to 2020. We use a non-linear autoregressive and distributed lag model to examine the asymmetric impact of remittance and oil price changes on trade balance. The study discovered that rising remittance inflows have a detrimental long-run impact on the trade balance. It also demonstrates that while a positive oil price shock worsens the trade balance, a negative oil price shock improves it in the long run. As a result, the paper emphasises the need to reduce skilled migration, properly channel remittance revenues, develop financial institutions, and implement more efficient exchange rate policies in order to achieve long-term trade surpluses.
... Furthermore, a few studies have examined the determinants of gold demand as well as the impact of gold imports and gold price on the external sector of India. Sahoo et al. (2020) examined the impact of crude oil imports and gold imports on India's current account balance (CAB) for the period 1980 to 2017. The authors found that crude oil imports positively and gold imports negatively affect the CAB of India. ...
... All variables are calculated in real terms after correcting for inflation using 2010 prices. The study has identified the control variables by reviewing relevant literature, including Sahoo et al. (2020), Kumar (2017), Mukherjee et al. (2017), Kanjilal and Ghosh (2014), Patel and Chandavarkar (2006), and Batchelor and Gulley (1995). ...
The focus of this research is to look at how remittance inflows affect gold imports in India for the period from 1980 to 2020. The study uses both the linear (symmetric) autoregressive distributed lag (ARDL) model of Pesaran et al. (2001) and the non-linear (asymmetric) autoregressive distributed lag (NARDL) model of Shin et al. (2014) to assess the symmetric and asymmetric impact of remittance inflows on gold imports. The key advantage of the NARDL model relies on its ability to simultaneously capture the short run and long run asymmetries through the positive and negative partial sum decompositions of changes in the independent variable(s). The results of linear ARDL model reveal that remittance inflows positively and significantly affect the gold imports in the long run, although negatively and significantly in the short run. The findings of NARDL model, on the other hand, show that there is significant asymmetric impact of remittance inflows upon the gold imports over the study period. The results confirm that whereas an increase in remittance inflows leads to a considerable increase in gold imports, a reduction in remittance inflows has no substantial impact in the long run. Another notable outcome is that, while a decline in gold prices boosts gold imports in the short run, both an increase and a decrease in gold prices enhance gold imports in the long run. Concerning the results of our study, it is suggested that more efficient channelization of remittance revenues and adoption of non-price measures may be deemed effective to curb the gold imports, which can contribute to reduce unfavourable trade balance.
... Furthermore, a few studies have examined the determinants of gold demand as well as the impact of gold imports and gold price on the external sector of India. Sahoo et al. (2020) examined the impact of crude oil imports and gold imports on India's current account balance (CAB) for the period 1980 to 2017. The authors found that crude oil imports positively and gold imports negatively affect the CAB of India. ...
... All variables are calculated in real terms after correcting for inflation using 2010 prices. The study has identified the control variables by reviewing relevant literature, including Sahoo et al. (2020), Kumar (2017), Mukherjee et al. (2017), Kanjilal and Ghosh (2014), Patel and Chandavarkar (2006), and Batchelor and Gulley (1995). ...
The focus of this research is to look at how remittance inflows affect gold imports in India for the period from 1980 to 2020. The study uses both the linear (symmetric) autoregressive distributed lag (ARDL) model of Pesaran et al. (2001) and the non-linear (asymmetric) autoregressive distributed lag (NARDL) model of Shin et al. (2014) to assess the symmetric and asymmetric impact of remittance inflows on gold imports. The key advantage of the NARDL model relies on its ability to simultaneously capture the short run and long run asymmetries through the positive and negative partial sum decompositions of changes in the independent variable(s). The results of linear ARDL model reveal that remittance inflows positively and significantly affect the gold imports in the long run, although negatively and significantly in the short run. The findings of NARDL model, on the other hand, show that there is significant asymmetric impact of remittance inflows upon the gold imports over the study period. The results confirm that whereas an increase in remittance inflows leads to a considerable increase in gold imports, a reduction in remittance inflows has no substantial impact in the long run. Another notable outcome is that, while a decline in gold prices boosts gold imports in the short run, both an increase and a decrease in gold prices enhance gold imports in the long run. Concerning the results of our study, it is suggested that more efficient channelization of remittance revenues and adoption of non-price measures may be deemed effective to curb the gold imports, which can contribute to reduce unfavourable trade balance.
... Meningkatknya daya saing ekspor menyebabkan meningkatnya neraca berjalan negara-negara ASEAN.Hasil temuan ini sejalan dengan temuan pada studi sebelumnya. Studi yang dilaksanakan oleh(Sahoo, Manoranjan, Hrushikesh Mallick, Mahalik, 2020) menemukan bahwa dalam jangka pendek kurs nominal memiliki pengaruh positif dan signifikan terhadap transaksi berjalan di India. Selanjutnya, penelitian dari (Riaz, Fareeha, Attiya Yasmin Javid, Mubarik, 2019) menemukan hasil bahwa dalam jangka pendek kurs nominal memiliki pengaruh positif dan signifikan terhadap transaksi berjalan di Bangladesh, India, dan Pakistan. ...
This study aims to examine the effect of bank credit for the government sector, bank credit for the private sector, and exchange rate on current account balance in ASEAN countries. This type of research is a quantitative descriptive study with the Random Effect EGLS panel data method. The data used are secondary data, obtained from the World Bank, FRED, and CEIC from 1990-2019. The results of this study indicate that exchange rate have a positive and significant effect on current account balance in ASEAN countries. Similarly, bank credit for the government sector, have a positive and significant effect on the current account balance. In addition, private sector bank credit, have a positive impact on the current account balance.
... On the other hand, the assets of natural gas are more in Offshore (Eastern) (37.34%) trailed by Western offshore (30.17%) [53,57,58]. The region wise distribution of natural gas in Andhra Pradesh, offshore (Eastern), Gujrat, and Western offshore is 3.38%, 37.24%, 5.11%, and 30.17% respectively (Table 4) [55]. ...
Energy security depends upon the supply and demand of electricity. Power supply volatility is a challenge in India power sector. India is mainly dependent on coal, which is not a viable long-term option. Hence the future of energy supply in India is renewable energy, and solar energy is the most prominent and reliable source of renewable energy. The solar power plant is classified as a low, medium, and high temperature based solar power plant. The low- temperature solar power plant, the collectors, are unglazed plates. In contract, medium-temperature collectors are flat plates, and high-temperature collectors concentrate sunlight using mirrors and lenses, achieving temperature and pressure up to 3000 °C and 20 bar. This article discusses the existing total energy scenario, current solar energy developments, supportive solar energy policies, and solar energy prospects. The tactics, availability, perspectives, potential, and successes of solar energy in India are discussed in this study. The authors compared the barriers to solar energy acceptance and examined the topic of social dissimilarity from a broad theoretical perspective. The study offers policymakers at the federal and state levels, as well as investors, a perspective on issues that may lead to investments in this area. The study states that solar energy could meet above 50% of electricity sector demand in India in 2040. This study determined that solar energy incidence in India is around 5000 trillion KWh (kilowatt-hours) each year. The solar energy accessible in a single year surpasses the energy output from the petroleum derivative. The average energy from the solar power plant is 0.30 kWh per m2 equal to the 1400–1800 peak rated capacity. India has many solar power facilities, making it one of the top producers of renewable energy power.
... Western offshore (30.17%) [53][54][55]. The region wise distribution of natural gas in Andhra ...
Energy security depends upon the supply and demand of electricity. Power supply volatility is a challenge in India power sector. India is mainly dependent on coal, which is not a viable long-term option. Hence the future of energy supply in India is renewable energy, and solar energy is the most prominent and reliable source of renewable energy. The solar power plant is classified as a low, medium, and high temperature based solar power plant. The low-temperature solar power plant, the collectors, are unglazed plates. In contract, medium-temperature collectors are flat plates, and high-temperature collectors concentrate sunlight using mirrors and lenses, achieving temperature and pressure up to 3000 o C and 20 bar. This article discusses the existing total energy scenario, current solar energy developments, supportive solar energy policies, and solar energy prospects. The tactics, availability, perspectives, potential, and successes of solar energy in India are discussed in this study. The authors compared the barriers to solar energy acceptance and examined the topic of social dissimilarity from a broad theoretical perspective. The study offers policymakers at the federal and state levels, as well as investors, a perspective on issues that may lead to investments in this area. The study states that solar energy could meet above 50 % of electricity sector demand in India in 2040. This study determined that solar energy incidence in India is around 5000 trillion KWh (kilowatt-hours) each year. The solar energy accessible in a single year surpasses the energy output from the petroleum derivative. The average energy from the solar power plant is 0.30 kWh per m 2 equal to the 1400-1800 peak rated capacity. India has many solar power facilities, making it one of the top producers of renewable energy power. Abbreviation AD = Accelerated Depreciation NCEF = National Clean Energy Fund C-WET = Centre for Wind Energy Technology NSM = National Solar Mission CERC = Central Electricity Regulatory Commission PV = Photovoltaic CSP = Concentrated Solar Power PPA = Power Purchase Agreement CC = concentrating collectors RECL = Rural Electrification Corporation Limited D = Distribution RPO = Renewable Purchase Obligation FIT = Feed-In Tariff RECs = Renewable Energy Certificates GBI = Generation Based Incentive RPSSGP = Rooftop PV and Small Solar Power Generation Program GDP = Gross Domestic Product RRF = Renewable Regulatory Fund HTF = Heat transfer fluid SHP = Small Hydropower ISA = International Solar Alliance SPV = Solar Rooftop Photovoltaic IREDA = Indian Renewable Energy Agency SERCs = State Electricity Regulatory Commissions JNNSM = Jawaharlal Nehru National Solar Mission T = Transmission MNRE = Ministry of new and renewable energy UT = Union territories MOP = Ministry of Power
... According to the results of the analysis, it has been determined that the CAD is caused by energy demand, contrary to economic growth. Sahoo et al. (2020) examined the effects of gold and oil exports on the CAD in the Indian economy using linear cointegration techniques for the 37-year period between 1980-2017. The findings of the study revealed a positive and significant effect between crude oil imports and Aka (2020) tried to identify the determinants of the CAD in Turkey by using the 1990-2018 annual data and the least-squares method. ...
This study investigates the effects of gold imports, energy imports and short-term capital inflows on current account deficits using Turkish quarterly data for the period 1996Q1–2021Q1. To this end, first, the current account deficit model is built based on the literature review and estimated using the autoregressive distributed lag (ARDL) model. Then the presence of cointegration among relevant variables is tested by employing bonds testing, and then the error correction model is estimated. The bonds testing results indicate cointegration among current account deficits, gold imports, energy imports, portfolio investment, foreign direct investment, reel effective exchange rate, real gross domestic products, openness, and financial development proxies. The empirical findings of this study reveal that while gold imports play a significant deteriorating role on Turkish current account deficits in the short and in the long term, energy imports and portfolio investment only have a short-term effect. Furthermore, appreciation of Turkish currency seems to increase current account deficits only in the long term; it has no short-term effect. Interestingly, the openness proxy, which is being used as a measure of international trade integration of a country to the world economy, exerts no effect on current account deficits neither in the long-term and nor in the short-term.
... A recent study by Huntington (2015) also shows that, in the case of oil-importing developing economies, crude oil imports do not significantly affect their CAB, whereas, for the oil-importing developed economies, crude oil imports have produced significant and adverse impact on their CAB. In a recent study, Sahoo, Mallick, and Mahalik (2019) also indicated that crude oil import is beneficial for improving India's CAB in the long run. In such conflicting circumstances, the study also raises an important research question of whether crude oil import matters more for improving India's current balance in the long run while controlling other important determinants in the CAB model. ...
... First, it investigates the impact of crude oil imports on India's CAB using the annual data from 1980-1981 to 2014-2015, which Sahoo et al. (2019). Second, our study is different from the recent study, indicating that, along with crude oil imports as key influencing factor, the present study also controls the impacts of other determinants, which may play a vital role on India's CAB in the long run. ...
... The recent study of Garg and Prabheesh (2017) confirms the "twin deficits" hypothesis for India. Arouri, Tiwari, and Teulon (2014), using monthly data, Our study is attempting to make a modest deviation over the existing studies, including the recent study by Arouri et al. (2014) and Sahoo et al. (2019), and hence it is empirically motivated to contribute to the literature in terms of developing and understanding the impact of crude oil imports on India's CAB by controlling fiscal balance, real exchange rate, trade openness, terms of trade, financial development and age dependency as other key determinants in the current account balance model. ...
Using annual data for the period 1980-2014, the study explores the impact of crude oil imports and real exchange rate on India’s current account performance in a current account balance model. Utilizing the recent cointegration econometric tools, the findings contrary to the theoretical prediction revealed that crude oil import significantly improves the current account balance in long-run. Furthermore, the fiscal balance and financial development significantly contribute to the current account performance, whereas real exchange rate, trade openness and age dependency cause deterioration in the long-run. These results have significant policy bearings on the sustainability of current account balance of India.
