Income convergence in India: a nonparametric approach

Sofi, Arfat Ahmad; Durai, S. Raja Sethu

doi:10.1007/s10644-015-9169-3

Cited by 13 publications

(6 citation statements)

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“…Kumar and Subramanian (2012) find divergence or rising inequality among the Indian states. Sofi and Durai (2016) find absolute divergence and conditional convergence among the 22 Indian states from 1980–1981 to 2010–2011. The study made by Sanga and Shaban (2017) on 15 major Indian states finds divergence of the economy at the aggregate level.…”

Section: Review Of Literaturementioning

confidence: 85%

“…In the Indian context, the imbalanced economic performance among the regions has also attracted substantial interest among researchers, policymakers and planners. As a result, several empirical studies on the convergence among Indian states/regions have been conducted (see e.g., Cashin and Sahay, 1996; Marjit and Mitra, 1996; Bajpai and Sachs, 1996; Ghosh et al , 1998; Rao et al , 1999; Nagaraj et al , 2000; Dasgupta et al , 2000; Aiyar, 2001; Sachs et al , 2002; Singh et al , 2003; Adabar, 2004; Bhattacharya and Sakthivel, 2004; Kar, and Sakthivel, 2006; Kar and Sakthivel, 2007; Nayyar, 2008; Ghosh, 2008; Das et al , 2010; Chikte, 2011; Sahoo, 2012; Kumar and Subramanian, 2012; Ghosh et al , 2013; Mallick, 2014; Cherodian and Thirlwall, 2015; Sofi and Durai, 2016; Sanga and Shaban, 2017; Chakraborty and Chakraborty, 2018; Mishra and Mishra, 2018; Hembram et al , 2019; Lolayekar and Mukhopadhyay, 2019; Lolayekar and Mukhopadhyay, 2020). Based on different samples of the states/regions over different periods, these studies give mixed results on the convergence of the Indian states/regions.…”

Section: Review Of Literaturementioning

confidence: 99%

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Regional economic growth in India: convergence or divergence?

Nayak

Sahoo

2021

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Purpose This paper aims to examine the convergence in per-capita income (measured as per-capita net state domestic product) of regions in India during the period 1990–1991 to 2017–2018. Two separate analyses have also been done for the sub-periods, i.e., 1990–1991 to 2003–2004 and 2004–2005 to 2017–2018, to find out the effect of the second phase of economic liberalization in India. Design/methodology/approach In a panel data study, the estimation of absolute and conditional beta (β)-convergence and sigma (σ)-convergence across 17 Indian regions have been done. To measure the dispersion of per-capita income across the regions in India, the standard deviation of logs, Gini coefficient, Mehran measure, Piesch measure, Kakwani measure and Theil index have been estimated. In addition to this, these indices have been regressed over time. Findings This study finds the presence of absolute and conditional β-convergence; the regions with low initial per-capita income have grown faster than the regions with high initial per-capita income. Further, this study finds that foreign direct investment (FDI) inflow and the availability of power enhance growth across regions. However, this study finds the presence of σ-divergence, which indicates that the economic inequality among the regions in India has widened over the periods, calling for policy interventions to promote growth in the backward regions through the promotion of FDI inflow and the availability of power. Originality/value This study highlights the rising economic inequality among the regions in India by analyzing the latest available data through appropriate econometric techniques.

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Section: Review Of Literaturementioning

confidence: 85%

Section: Review Of Literaturementioning

confidence: 99%

Regional economic growth in India: convergence or divergence?

Nayak

Sahoo

2021

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“…These methodological developments necessitate estimating the growth regressions considering spatial interactions. 3 For further explanations refer Quah (1993Quah ( , 1996aQuah ( , 1996bQuah ( , 1997; Galor (1996); Magrini (2009); Sofi and Durai (2016) among others. 4 Even the quantitative information obtained through Quah's (1993Quah's ( , 1996aQuah's ( , 1996b Twin Peaks hypothesis represents only one peak which cannot truly reflect the full information of convergence clubs.…”

Section: Ethics Statementmentioning

confidence: 99%

“…3 3 For further explanations refer Quah (1993, 1996a, 1996b, 1997); Galor (1996); Magrini (2009); Sofi and Durai (2016) among others. …”

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confidence: 99%

Economic growth and club convergence: Is there a neighbour's effect?

2021

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The study investigates economic growth and club convergence in a crosscountry framework from 1970-1971 to 2014-2015. In particular, we test the club convergence hypothesis through a non-parametric and spatial interaction setting. The kernel density estimate shows a cyclical behaviour of per capita incomes, albeit following a common steady state. The conditional distribution is concentrated around the mean indicating a similar relative position across the heterogeneous countries. The transitional probabilities are strong enough to demonstrate a significant sign of clubbing. On testing the convergence hypothesis, we perceive strong evidence of club convergence across the countries. A persistent spatial dependence is unveiled across the proximities, therefore confirming the neighbour's effects in club formation. The study realizes a need to harmonize the interaction between the countries to improve the conditions for achieving long-run sustained economic growth.

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“…This leads to emergence of literature that examines the convergence with the help of advanced econometric methodologies[1] (Friedman, 1992; Quah, 1993a, b, 1997). More recently Sofi and Durai (2016) provide a comprehensive examination on the distributional aspect of income convergence among Indian states and highlight the methodological issues in estimating the convergence hypothesis. The study demonstrates that there are significant signs of club convergence among the states.…”

Section: Introductionmentioning

confidence: 99%

Income convergence in India: evidence from nonparametric panel data

Sofi

Durai

2017

JES

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Purpose The purpose of this paper is to investigate convergence hypothesis in a balanced panel of 22 Indian states for the time period of 1980-81 to 2010-11 by applying nonparametric model setting in a panel framework. Design/methodology/approach The present study uses nonparametric and semi-parametric panel data methods to test the absolute and conditional convergence, respectively, and examines the income convergence using nonparametric panel data methods with state specific effects taken into consideration. These models are being estimated by the iterative process for a balanced panel of state wise per capita income and other conditioning variables for the time period of 1980-81 to 2010-11. For removing the fixed effects, the authors follow within transformation procedure according to the feasibility of the problem. Since convergence is estimated by regressing dependent variable on initial level of independent variable (as growth rate of income and per capita income in this case). So using usual transformation for removing the fixed effects is not feasible because by doing so the authors may end up with singular matrices on both sides of the regression model. Findings The results reject the null of parametric specification for both absolute as well as conditional convergence model. As to the outcome of the empirical analysis, the findings reveal that the Indian states are diverging in absolute sense and converging on conditional basis. Convergence happens to be consistent and conditional upon public expenditure, power generation share of primary and tertiary sector to Gross State Domestic Product. Originality/value The originality of the study is in its application of advanced methodology to highlight the model misspecifications while testing the convergence hypothesis in earlier literature.

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Income convergence in India: a nonparametric approach

Cited by 13 publications

References 53 publications

Regional economic growth in India: convergence or divergence?

Regional economic growth in India: convergence or divergence?

Economic growth and club convergence: Is there a neighbour's effect?

Income convergence in India: evidence from nonparametric panel data

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