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In an era of globalization, trade in goods and cross-border services and capital flows play a key role in determining the economic growth path of countries. Over the last two decades, countries have embarked on several alternate tracks to liberalize and deepen their linkage with the world economy. The growing trade-investment nexus and the emerging developments lead to deeper international production networks, rise in cross-border trade in services and in regional trade agreements and so on. The debate of whether it is possible to empirically validate the potential benefits of this deepening trade-investment linkage is ongoing. The evidence in literature is, however, ambiguous. This book contributes to the literature by looking at Asian economies and at the EU, Maghreb countries and Pacific Island economics. It examines the issues under four broad areas, namely: (1) trade: theoretical and policy issues, (2) factor flows: impact on trade and welfare, (3) impact of trade and factor flows on environment and (4) institutions, international trade and policy issues.

The present study investigates the relationship between export performance and the level of financial development for 30 Indian states and union territories (UTs) from 2011–12 to 2020–21. The study first ranks the states and UTs on the parameters of financial development and physical infrastructure using the robust principal component analysis method. By applying the instrumental variable fixed effects panel data technique, the study observes that the level of financial development has a significant positive impact on the export performance of the states. The study also finds a positive effect of the availability of physical infrastructure, quality of governance and fiscal position on states' export performance but does not observe a significant role of political stability in this context. The results suggest that export growth in the economically laggard and Himalayan states can come through policy interventions to improve financial development. In contrast, landlocked states need better physical infrastructure to facilitate easier production and transportation of export goods. The study lends new perspectives to the nascent literature on inter-regional disparities in India's export performance and is expected to provide insights into improving the sub-national export performance of other developing countries as well. JEL Codes: F14, F36, F4

Purpose
This study aims to empirically examine the relationship between financial development and trade performance for the Indian economy through a time-series analysis with annual data over the period 1980-2016.


Design/methodology/approach
The study uses new econometrics techniques such as unit root tests in the presence of endogenous structural breaks and autoregressive-distributed lag bounds test for the analysis.


Findings
Empirical results reveal that the level of financial development has a significant positive impact on the exports, imports and trade balance of manufactured goods for the Indian economy.


Practical implications
The findings suggest that the positive effect of financial development on trade performance is a potential mechanism through which the former may affect overall income and growth rates. It also implies that standalone trade liberalisation policies are insufficient to increase Indian exports. Indian policymakers should, therefore, consider the implications of the next set of financial sector reforms on the country's trade flows, besides their positive impact on the economic performance. The findings are particularly relevant in the present scenario when the export growth is decelerating and there is a marked slowdown in private credit flows because of the problem of non-performing assets.


Originality/value
This study is the first of its kind which provides a holistic analysis of the relationship between financial development and trade performance for the Indian economy and also investigates the direction of causality between financial development and international trade by considering the possible presence of multiple endogenous structural breaks in the data. Moreover, in contrast to the available literature, the present study focuses on net exports as a key indicator of trade performance rather than trade openness.

Introduction by the Editors -- Empirical Estimates of Inverted Duty Structure and Effective Rate of Protection- The case of India -- Does Past Performance in Home Market Affect Export Participation of New Exporters? Evidence from Indian Firms -- A Panel Data Analysis of Indo-Africa Trade: A Gravity Model Approach -- The Validity of J-Curve: India versus BRICS Countries: A Panel cointegration Approach -- Trade Costs Between India and ASEAN: A Gravity Framework -- Tryst with Financial Inclusion: Understanding the role of Digital Technology, Governance and Institutions in BRICS Nations -- Macroeconomic Factors Affecting FDI Inflows into Emerging Economies – A Panel Study -- The Pattern of Inbound Foreign Direct Investment into India -- Sustainability of India's Current Account Deficit: Role of Remittance Inflows and Software Services Exports -- Green-field versus Merger and Acquisition: Role of FDI on Economic Growth in South Asia -- Risk Modelling by Coherent Measure Using Family of Generalized Hyperbolic Distributions -- Trade Liberalisation and Poverty Alleviation in Nigeria: The Complimentary Role of Institutions -- Trade Liberalization, Growth and Poverty: Empirical Analysis for India -- India's Trade Sensitive Employment: A Comprehensive Firm-level Analysis -- A Panel Study on Fiscal Policy and Gender Inequality: Efficacy of Gender Budgeting in Asia Pacific Countries -- An Analysis of Labour Intensive Exports to United States: Unlocking India's Potential -- Is 'MAKE IN INDIA' a success? A Review from the Electronics Sector in India -- Examining Causal Relation between Financial Inclusion and Telecommunication with Special Reference to Kerala and Bihar using SEM -- Impact of Macro Economic Variables and Bank Specific Elements on Banking Sector in India -- Environmental Efficiency and Trade theory: Evidence from Indian Metal Sector -- Prospects for Air Services in Indonesia under Modified General Agreement on Trade in Services: India-China Dimension.