Macroeconomic Variables Affecting External Commercial Borrowings: An Investigation

  • Pooja MisraEmail author
  • Jagdish Shettigar


This study follows a macroeconomic approach in determining the factors that impact external commercial borrowings (ECBs). It considers the impact of independent factors, that is, exchange rate, differential growth rate, index of industrial production, interest rate differential, differential inflation, global money supply, and capital account openness on the dependent factor of external commercial borrowings based on quarterly data for the period July 2004–December 2017. The study also seeks to determine the relationship between the independent variables and the dependent variables, that is, external commercial borrowings in the short run and long run based on Johansen cointegration test and vector autoregressive/vector error correction model. It also determines the causal relationship between the independent and dependent variables through the Granger causality test.


External commercial borrowings Exchange rate Differential growth rate IIP Interest rate differential Differential inflation Global money supply Capital account openness Johansen cointegration VECM 


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Authors and Affiliations

  1. 1.Birla Institute of Management TechnologyGreater NoidaIndia

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