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The Role of Cooperatives, Remittances, and Infrastructure in Export Performance of Nepal: ARDL Approach of Cointegration

Journal: Sumerianz Journal of Economics and Finance (Vol.3, No. 10)

Publication Date:

Authors : ; ; ;

Page : 151-159

Keywords : Export performance; Cooperatives; Remittances; Infrastructure; Nepal.;

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Cooperatives, remittances, and foreign direct investment (FDI) are crucial source of funds required for better entrepreneurships, which combinedly along with the quality of infrastructure can contribute to enhance the supply side factors of the export performance. Due to the well perceived role of cooperatives, Nepal's constitution 2015 mentions this sector as one of the three pillars of the national economy while around 30 percent of Nepal's GDP comes from remittances. As the country lacks the domestic sources for investment, FDI has become an indispensable part of the development sources of the developing countries in the recent decades. This paper analyzes the role of cooperatives, remittances, FDI and infrastructure in export performance of Nepal using the Autoregressive Distributive Lag (ARDL) approach of cointegration as suggested by the properties of the time series data for the period of 26 years from 1993 to 2018. The major finding shows that the cooperatives have not contributed to export performance as expected, however the role is positive. The remittances have a strong negative role on export performance, which is largely impacted by the number and quality of the infrastructure. The role of FDI is also negative and might be due to insufficient volume to contribute substantially. This fact seeks the urgent attention from the policy makers to make the country more investment friendly.

Last modified: 2021-01-04 17:05:21