The aptness of import-led growth hypothesis for sustainable development in South Asia: Do energy utilization and natural resources matter?

In recent years, the escalating trade activities (imports and exports) have spurred a growing body of research on their linkages with economic progress and sustainability. However, the impacts of imports and export diversification on sustainable economic growth have been rarely explored. This paper aims to fill this gap by exploring the role of import product diversification in the sustainable economic performance of South Asian countries. More precisely, this paper introduces the export-led growth hypothesis and explores the role of import product diversification, natural resources, and human capital for sustainable economic growth. Empirically, this paper uses data from 1995 to 2020 with 9 South Asian economies and runs advanced panel cointegration techniques along with long-run estimation techniques robust to endogeneity, cross-sectional dependence, autocorrelation, and other panel data problems. The outcomes display a significant correlation between import product diversification, natural resources, and sustainable development. The findings can provide insights to formulate efficient import diversification strategies for sustainable growth, especially in developing countries.