Speaker: Dr. Lei Lei Song and Dr. Tara Iyer, team from Asian Development Bank, New Delhi

Date & Hour: 07 August 2019, 4:00 pm

Venue: Seminar Hall 1

Title: Export Slowdown in South Asia

Abstract: This study analyzes the determinants of export performance in South Asia with a focus on the economies of India, Bangladesh, and Sri Lanka. An autoregressive distributed lag model is applied on the data to estimate the response of merchandise exports to various macroeconomic factors including external demand and relative prices. We find that global demand is a primary determinant of export performance, and that real exchange rate fluctuations play a small but significant role in affecting exports. Capital investment is found to be a significant determinant of export performance. A 1% increase in the investment share of GDP in India and Sri Lanka leads to around a 0.9% long-run increase in export volumes from these countries. In light of the underperformance of exports in South Asia, our findings point toward the need to enhance capital investment and promote investment friendly policies in the region.