An Analysis of the Factors Affecting International Trade of India and China

This study analyzes the relationship between infrastructure and technology expenditure and exchange rate on the volume of international trade. As trade of goods and services is believed to related to physical and social infrastructure and technological adaption. Another significant factor which has been proved to affect the volume of international trade is Exchange Rate. The countries here taken for the study are India and China. The period of study is year 2000 to 2017. GFC has been taken as the proxy of physical and social infrastructure expenditure. R and D expenditure is taken as measurement of technological innovation domestically. REER has been taken as the measure of inflation adjusted exchange rate. These factors have been found to affect the volume of international trade differently in both the countries.