An empirical study on the import demand in Sri Lanka, ARDL approach
The main objective of this present study is to estimate an import demand function for Sri Lanka using time series data from 1980 to 2018. It also assesses the elasticity of import demand for the determinants of aggregate imports function. The results revealed the long-run relationship among the variables. There is a positive impact of real national income on imports. The elasticity of import regarding real national income is proportional. The elasticity coefficient is 0.8286. One percentage increase in real national income leads to 0.8286 percentage increase in import. On the other side, there is a negative impact of import price on imports. The coefficient for this variable is statically significant at 5% level. The elasticity coefficient is -1.5617. It indicates that the percentage change in import price leads to a percentage change in import. A one percentage increase in import price leads to a decrease in import by 1.5617 percentage. The domestic price is found insignificant.