Determinants of Merchandise Exports in Madhya Pradesh: Short- and Long-Run Elasticities from an ARDL Bounds Analysis (2002–2025)

Abstract - This research paper analyses the determinants of merchandise exports in Madhya Pradesh, a landlocked and largely agrarian state. The paper takes into consideration data over 2002–03 to 2024–25 using annual time-series. Applying the ARDL bounds testing approach, the paper uncovers cointegration (F-statistic = 10.57, exceeding the upper critical bound) and estimate short- and long-run elasticities for gross state domestic product (GSDP), scheduled commercial bank credit, road infrastructure, and industrial capital. Bank credit and road length exert significant positive long-run effects (elasticities of 0.76 and 1.03, respectively; p<0.05), while GSDP and industrial capital effects prove insignificant owing to multicollinearity (VIF>20). The error correction term (-1.00; p=0.003) signals full adjustment to equilibrium within one year. Findings underscore targeted credit expansion and road investments to elevate state exports toward India's US$ 1 trillion national target. Key Words: Exports, ARDL, Cointegration, Infrastructure, Bank Credit, Madhya Pradesh