An Empirical Analysis of sub-National Growth Modelling, Inter- State Spillovers and Inter- Sectoral linkages of Economic Growth in India
Rittu, Susan Varkey
An Empirical Analysis of sub-National Growth Modelling, Inter- State Spillovers and Inter- Sectoral linkages of Economic Growth in India
1 Introduction 1
Theoretical Perspectives of Economic Growth 4
Statement of Research Problem .......... 6
Inter-state and inter-sectoral growth spillovers and their implic-
ations for agriculture 6
The political economy of determinants of sub-national economie
growth . 9
Per capita income convergence among Indian states 10
Objectives of the Study ................. 12
Data and Methodology . 13
1.4.1. Data
1.4.2 Econometric Techniques ........... 14
Scope of the study
Limitations of the Study ..... 25
Organisation of the Thesis .... 25
2 Inter-State and Inter-Sectoral Growth Spillovers and their Implica-
tions for Agriculture 27
Introduction .
Review of Literature
Data and Methodology ...... 40
2.3.1 Data ...... 40
Methodology . . 43
Panel unit Root Test 43
Panel Cointegration Test . . 46
Panel Causality . 47
2.3.G Fully Modified Ordinary Least Squares 48
Empirical Results and Discussion 4S
Sectoral linkages in a panel framework 48
Sectoral linkages of specific services with agriculture .
State specific analysis .
Inter-state linkages in a panel frame work 62
State specific analysis . 70
Conclusion and Policy Implication . 74
3 The Political Economy of Determinants of Sub-National Economic Growth
Introduction .......
Review of Literature .......
Socio economic determinants of economic growth
Political determinants of economic growth
Data and Methodology ......
Description of the Variable .
Methodology . .
Empirical Results and Discussion
Robustness of Results
Conclusion and Policy Suggestions
77
80
S0
86
9u
100
103
109
115
130
4 Per Capita Income Convergence Among Major States in India 132
Introduction .
Review of Selected Literature . .
Data and Methodology .
4.2.1 Data ......
Description of the Variable .
Measuring convergence .
Empirical Results and Analysis
Per capita income convergence across Indian m• i r states ... 153
Absolute Q convergence .....
4.:i.3 Conditional J conver 6e •• e
Conclusion and Suggestion
5 Major Findings and Policy Implications
Major Findings and Policy Suggestions .....
o.1.1 Inter-state and inter-sectoral growth spillovers and their implic- ations for agriculture. .
The political economy of determinants of sub-national economic growth ....
Per capita income convergence among Indian states
Agenda for Future Research .............
A
Growth of PGSDP for the period 1991-92 to 2013-14
Political ideologies
2.1 Description of the Variable . 42
2.2 Descriptive Statistics ....... 43
2.3 Panel Unit Root Tes(Inn, Pesaran and Shin and Levin Lin Chu) 45
2.4 Pedroni Panel Cointegration 50
2.5 Panel Causality ..... o0
2.6 Long Run Coefficients of Agricultural Output(AGSDP) 51
2.7 Pedroni Panel Cointegration (AGSDP and Transport, Storage, Com-
munication) ....... o4
2.8 Pedroni Panel Cointegration (AGSDP , Banking and Insurance) 55
2.9 Pedroni Panel Cointegration (AGSDP and Trade, Hotel, Restaurant) 55
2.10 Panel Causality (AGSDP and Transport, Storage,Communication) . . 56
2.11 Panel Causality (AGSDP, Banking and Insurance) . 56
Panel Causality(AGSDP, Trade, Hotel and Restaurants) . 5T
AGSDP as the Dependant Variable
2.14 AGSDP as the Dependant Variable
2.15 AGSDP as the Dependant Variable
2.16 State Specific Modelling of Agricultural Growth
2.17 Pedroni Panel Cointegration(GSDP, ROSGSDP) ...
2.18 Pedroni Panel Cointegration (AGSDP, ROSAGSDP)
2.19 Pedroni Panel Cointegration(IGSDP and ROSIGSDP)
2.20 Pedroni Panel Cointegration(SGSDP,ROSSGSDP) . .
2.21 Panel Causality GSDPand ROSGSDP
2.22 Fully Modified Ordinary Leat Squares( GSDP as the Dependant Vari-
able) ....................................
2.23 Fully Modified Ordinary Leat Squares(AGSDP as the Dependant Vari-
able) ...........
2.24 Fully Modified Ordinary Leat Squares(IGSDP us the Dependant Vari-
able) ...........
2.25 Fully Modified Ordinary Leat Squares(SGSDP as the Dependant Vari-
able) .....
2.26 Time series Analysis (GSDP as the dependent variable) Ordinary Least
Squares(Pre-reform)
2.27 Time series Analysis (GSDP as the dependent variable reforms) Or-
dinary Least Squares(Reform) ......
Description of the Variable ....
Description of the Variable(Contd.) ....
Descriptive Statistics(1991-2000)
Descriptive Statistics(2001—2013)
Correlation Matrix(1991-2000) .............
Correlation Matrix(2001-2013)
Determinants of Per Capita GSDP and Growth of Per Capita GSDP
GMM Estimation Results (1991-2000)
Determinants of Per Capita GSDP and Growth of Per Capita GSDP
GMM Estimation Results for 2001-2013 .
Impact of FDI on Economic Growth (1991-2000) ....
Impact of FDI on Economic Growth (2001-201.3)) ......
Impact of FD on Economic Growth(1991-2000)
Impact of FD on Economic Growth (2001-2013) ......
Impact of GFCF on Economic Growth(1991-2000) .
Impact of GFCF on Economic Growth(2001-2013) .
Panel Unit Root Test(1990-2000) .........
Panel Unit Root Test(2001-2013) .........
Auto Regressive Distributive Lag Model(1991-2000) ..........
Auto Regressive Distributive Lag Model(2001-2013) ..........
Description of the Variable .
Absolute Convergence .............
150
155
Growth rate of Per Capita Income as the Dependant Variable(1991-2000)158
Growth rate of Per Capita Income as the Dependant Variable(2001-2013)161
330 / RIT
An Empirical Analysis of sub-National Growth Modelling, Inter- State Spillovers and Inter- Sectoral linkages of Economic Growth in India
1 Introduction 1
Theoretical Perspectives of Economic Growth 4
Statement of Research Problem .......... 6
Inter-state and inter-sectoral growth spillovers and their implic-
ations for agriculture 6
The political economy of determinants of sub-national economie
growth . 9
Per capita income convergence among Indian states 10
Objectives of the Study ................. 12
Data and Methodology . 13
1.4.1. Data
1.4.2 Econometric Techniques ........... 14
Scope of the study
Limitations of the Study ..... 25
Organisation of the Thesis .... 25
2 Inter-State and Inter-Sectoral Growth Spillovers and their Implica-
tions for Agriculture 27
Introduction .
Review of Literature
Data and Methodology ...... 40
2.3.1 Data ...... 40
Methodology . . 43
Panel unit Root Test 43
Panel Cointegration Test . . 46
Panel Causality . 47
2.3.G Fully Modified Ordinary Least Squares 48
Empirical Results and Discussion 4S
Sectoral linkages in a panel framework 48
Sectoral linkages of specific services with agriculture .
State specific analysis .
Inter-state linkages in a panel frame work 62
State specific analysis . 70
Conclusion and Policy Implication . 74
3 The Political Economy of Determinants of Sub-National Economic Growth
Introduction .......
Review of Literature .......
Socio economic determinants of economic growth
Political determinants of economic growth
Data and Methodology ......
Description of the Variable .
Methodology . .
Empirical Results and Discussion
Robustness of Results
Conclusion and Policy Suggestions
77
80
S0
86
9u
100
103
109
115
130
4 Per Capita Income Convergence Among Major States in India 132
Introduction .
Review of Selected Literature . .
Data and Methodology .
4.2.1 Data ......
Description of the Variable .
Measuring convergence .
Empirical Results and Analysis
Per capita income convergence across Indian m• i r states ... 153
Absolute Q convergence .....
4.:i.3 Conditional J conver 6e •• e
Conclusion and Suggestion
5 Major Findings and Policy Implications
Major Findings and Policy Suggestions .....
o.1.1 Inter-state and inter-sectoral growth spillovers and their implic- ations for agriculture. .
The political economy of determinants of sub-national economic growth ....
Per capita income convergence among Indian states
Agenda for Future Research .............
A
Growth of PGSDP for the period 1991-92 to 2013-14
Political ideologies
2.1 Description of the Variable . 42
2.2 Descriptive Statistics ....... 43
2.3 Panel Unit Root Tes(Inn, Pesaran and Shin and Levin Lin Chu) 45
2.4 Pedroni Panel Cointegration 50
2.5 Panel Causality ..... o0
2.6 Long Run Coefficients of Agricultural Output(AGSDP) 51
2.7 Pedroni Panel Cointegration (AGSDP and Transport, Storage, Com-
munication) ....... o4
2.8 Pedroni Panel Cointegration (AGSDP , Banking and Insurance) 55
2.9 Pedroni Panel Cointegration (AGSDP and Trade, Hotel, Restaurant) 55
2.10 Panel Causality (AGSDP and Transport, Storage,Communication) . . 56
2.11 Panel Causality (AGSDP, Banking and Insurance) . 56
Panel Causality(AGSDP, Trade, Hotel and Restaurants) . 5T
AGSDP as the Dependant Variable
2.14 AGSDP as the Dependant Variable
2.15 AGSDP as the Dependant Variable
2.16 State Specific Modelling of Agricultural Growth
2.17 Pedroni Panel Cointegration(GSDP, ROSGSDP) ...
2.18 Pedroni Panel Cointegration (AGSDP, ROSAGSDP)
2.19 Pedroni Panel Cointegration(IGSDP and ROSIGSDP)
2.20 Pedroni Panel Cointegration(SGSDP,ROSSGSDP) . .
2.21 Panel Causality GSDPand ROSGSDP
2.22 Fully Modified Ordinary Leat Squares( GSDP as the Dependant Vari-
able) ....................................
2.23 Fully Modified Ordinary Leat Squares(AGSDP as the Dependant Vari-
able) ...........
2.24 Fully Modified Ordinary Leat Squares(IGSDP us the Dependant Vari-
able) ...........
2.25 Fully Modified Ordinary Leat Squares(SGSDP as the Dependant Vari-
able) .....
2.26 Time series Analysis (GSDP as the dependent variable) Ordinary Least
Squares(Pre-reform)
2.27 Time series Analysis (GSDP as the dependent variable reforms) Or-
dinary Least Squares(Reform) ......
Description of the Variable ....
Description of the Variable(Contd.) ....
Descriptive Statistics(1991-2000)
Descriptive Statistics(2001—2013)
Correlation Matrix(1991-2000) .............
Correlation Matrix(2001-2013)
Determinants of Per Capita GSDP and Growth of Per Capita GSDP
GMM Estimation Results (1991-2000)
Determinants of Per Capita GSDP and Growth of Per Capita GSDP
GMM Estimation Results for 2001-2013 .
Impact of FDI on Economic Growth (1991-2000) ....
Impact of FDI on Economic Growth (2001-201.3)) ......
Impact of FD on Economic Growth(1991-2000)
Impact of FD on Economic Growth (2001-2013) ......
Impact of GFCF on Economic Growth(1991-2000) .
Impact of GFCF on Economic Growth(2001-2013) .
Panel Unit Root Test(1990-2000) .........
Panel Unit Root Test(2001-2013) .........
Auto Regressive Distributive Lag Model(1991-2000) ..........
Auto Regressive Distributive Lag Model(2001-2013) ..........
Description of the Variable .
Absolute Convergence .............
150
155
Growth rate of Per Capita Income as the Dependant Variable(1991-2000)158
Growth rate of Per Capita Income as the Dependant Variable(2001-2013)161
330 / RIT