What is new about India’s economic growth? An industry level productivity perspective

2019 ◽  
Vol 13 (1) ◽  
pp. 11-36
Author(s):  
Deb Kusum Das ◽  
Suresh Chand Aggarwal ◽  
Abdul Azeez Erumban ◽  
Pilu Chandra Das
Keyword(s):  
Economic Growth ◽  
Output Growth ◽  
Data Set ◽  
Relative Significance ◽  
Content Type ◽  
Indian Economy ◽  
Unique Data ◽  
Industry Level ◽  
Productivity Data ◽  
Growth Empirics

Purpose The dynamics of economic growth in India continues to engage economists and still remains much debated. The trends and patterns of growth observed in India have seen acceleration in growth in Indian economy in the period following macroeconomic reforms and policy changes in investment and trade regimes. However, when and how did India transform itself from Hindu rate of growth to the present growth regime continues to be debated. Design/methodology/approach Using INDIA KLEMS data set, this study provides a distinctive perspective on India’s economic growth. A unique data set comprising 27 sectors of Indian economy at a disaggregate industry level for a period of 30 years, beginning 1980s, attempts to understand the dynamics of India’s growth from the contribution of industries that comprise the Indian economy. Findings This productivity data set offers a new way of analyzing the dynamics of growth including the sources of growth. The growth empirics allow evaluation of the relative significance of total factor productivity growth vis-a-vis input accumulation in accounting for output growth. In addition, the authors were able to document the industry contributions to aggregate growth. In this way, they were able to analyze the importance of the constituent industries within the different sectors of the economy − agriculture, manufacturing, construction and market, as well as non-market services in accounting for the observed growth in India. In conclusion, the industry perspective offers a new and analytical way of discerning new aspects of India’s march to higher growth regimes in post-1990s era. Originality/value A unique data set comprising 27 sectors of Indian economy at a disaggregate industry level for a period of 30 years, beginning 1980s, attempts to understand the dynamics of India’s growth from the contribution of industries that comprise the Indian economy.

scholarly journals Financial and economic stability as ‘two sides of a coin’

2015 ◽  
Vol 7 (4) ◽  
pp. 327-353 ◽  
Author(s):  
Muhammad Ali Nasir ◽  
Mushtaq Ahmad ◽  
Ferhan Ahmad ◽  
Junjie Wu
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Financial Stability ◽  
Strong Association ◽  
Price Stability ◽  
Economic Stability ◽  
Data Set ◽  
Content Type ◽  
The Real ◽  
Stability And Instability

Purpose – The purpose of this paper is to provide a different context for considering issues of financial stability and instability, with reference to economic growth and price stability in particular. Design/methodology/approach – This paper pursued an empirical exploration of six pillars of financial stability, based on a data set for the UK extending from 1985 (Q1) to 2008 (Q2), through the construction of a vector error correction model, including an impulse response function analysis. Findings – The findings show a strong association between the financial and economic stability even in a non-crisis regime. This includes, for example, a strong association exists between the stock market and the real economy; exchange rate appreciation may not provide for long-term real economic growth; inflation does not contribute to real economic growth, both the sensitivity of the economy to yields and a significant lag in transitional effects from financial markets to the real sector; a positive role of credit creation within a non-crisis regime; exchange rate appreciation affects purchasing power; and potential points of linkage between sovereign debt activity and general price levels. Research limitations/implications – The findings should be considered in the context of a concept of the economy as fundamentally dynamic and subject to complex cumulative processes. Practical implications – The findings indicate there is a role for state oversight and intervention within a non-crisis regime based on the complexity of possible interactions that may undermine financial and price stability, with consequences for their association with economic growth. Originality/value – The study provides a new perspective for considering issues of financial stability and instability.

Does credit market inefficiency affect technology adoption? Evidence from Sub-Saharan Africa

2016 ◽  
Vol 76 (4) ◽  
pp. 494-511 ◽  
Author(s):  
Abdul-Hanan Abdallah
Keyword(s):  
Technology Adoption ◽  
Credit Market ◽  
Sub Saharan Africa ◽  
Food Crops ◽  
Agricultural Technologies ◽  
Data Set ◽  
Content Type ◽  
Unique Data ◽  
Market Inefficiency ◽  
Sub Saharan

Purpose The purpose of this paper is to investigate factors affecting the adoption of agricultural technologies in Sub-Saharan Africa, specifically the role of credit market inefficiency in adoption of agricultural technologies in the region. Design/methodology/approach Most importantly, the paper applies a 2SLS model on a unique data set on nine agrarian countries from Sub-Saharan Africa’s intensification of food crops agriculture (Afrint) to provide evidence on how credit market inefficiency affects adoption of technologies in the sub region. Findings The study finds that the relationship between credit and technology adoption is one-way causal relation (i.e. credit access leads to technology adoption) as opposed to a two-way relation (i.e. mutual dependent relation). Further, the results indicate that credit market inefficiency can be a major barrier to the adoption of yield enhancing technologies in Sub-Saharan Africa. Further, the study showed mixed results for household variables. The results give credence to studies that highlight the importance of infrastructure and risk control in the adoption of new technologies. Research limitations/implications The study is limited to only nine countries in Sub-Saharan Africa. Thus, the findings and interpretations should be considered as such. Further, there is the need for further research that considers all the region so as to establish whether or not there is a relationship between credit market inefficiencies and technology adoption in the region. Practical implications The policy implication is that microfinance institutions should consider scaling up their credit services to ensure that more households benefit from it, and in so doing technology adoption will be enhanced. Originality/value The main contribution of the study lies in its use of a unique data set from Sub-Saharan Africa’s intensification of food crops agriculture (Afrint) to investigation relationship between credit market inefficiency and technology adoption.

Economics of savings-based finance: an interest-free model of rotating savings and credit association in Turkey

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yusuf Dinç ◽  
Rashed Jahangir ◽  
Ruslan Nagayev ◽  
Fahrettin Çakır
Keyword(s):  
Financial Market ◽  
Design Methodology ◽  
Data Set ◽  
Content Type ◽  
Unique Data ◽  
Credit Associations ◽  
Free Model ◽  
Savings And Credit Associations ◽  
Financing And Investment ◽  
Credit Association

Purpose The emerging markets have been witnessing a remarkable revival of rotating savings and credit associations (ROSCAs) serving as alternative informal financing and investment platforms, also known as savings-based finance (SBF) in Turkey. The purpose of this study is to present the SBF model mathematically, analyse the performance of the SBF sector and propose a new Sharīʿah-compliant SBF model for the acquisition of durables. Design/methodology/approach The paper thoroughly reviews the concept and practice of ROSCA across the globe, mathematically models and empirically analyses the performance of Turkish SBF companies using a unique data set. Findings The study formulates a two-person SBF model and proposes a Mudarabah-Wakalah hybrid model with a new investment feature. It is found that the concept of ROSCA is being operationalized in 105 countries across the globe under different names with slight business model modifications. The research also reveals that the demand for financing of durables in Turkey significantly increased in recent years with the demand for housing is twice greater compared to vehicles. Most importantly, a strong significant inter- and intra-comovement is observed between these durables implying that the success of the sector in one segment has attracted the customers to other SBF products. It shows that the SBF institutions can effectively serve as the alternative financing houses for pooling savings and financing the durables, and they have strong potential to capture a larger financial market share in Turkey and even globally. Originality/value The study constructs mathematical models and proposes a new investment wing to an existing SBF wealth fund.

The impact of financial development, economic growth and energy consumption on environmental degradation

2015 ◽  
Vol 26 (5) ◽  
pp. 666-682 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri ◽  
Geetilaxmi Mohapatra
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Environmental Degradation ◽  
Series Data ◽  
Development Economic ◽  
Content Type ◽  
Indian Economy ◽  
Long Run ◽  
The Impact

Purpose – The purpose of this paper is to investigate the impact of financial development, economic growth and energy consumption on environment degradation for Indian economy by using the time series data for the period 1971-2011. Design/methodology/approach – The stationary properties of the variables are checked by ADF, DF-GLS, PP and Ng-Perron unit root tests. The long-run relationship is examined by implementing the Autoregressive Distributed Lag bounds testing approach to co-integration and error correction method (ECM) is applied to examine the short-run dynamics. The direction of the causality is checked by VECM framework and variance decomposition is used to predict exogenous shocks of the variables. Findings – The empirical evidence confirms the existence of long-run relationship among the variables. Financial development appears to increase environmental degradation in India. The main contributors to environmental degradation are: economic growth, energy consumption financial development and urbanization. The results also lend support to the existence of environmental Kuznets curves for Indian economy. Research limitations/implications – The present study suggests that environmental degradation can be reduced at the cost of economic growth or energy efficient technologies should be encouraged to enhance the domestic product with the help of financial sector by improving environmental friendly technologies from advanced economies. Originality/value – This paper proposes to make a contribution to the existing literature through examining the relationship between financial development and environmental degradation in Indian economy during 1971-2011 by employing modern econometric techniques.

Political regimes and foreign aid effectiveness in Ghana

2019 ◽  
Vol 18 (1) ◽  
pp. 15-33 ◽  
Author(s):  
Vincent Konadu Tawiah ◽  
Evans John Barnes ◽  
Prince Acheampong ◽  
Ofori Yaw
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Political Ideology ◽  
Aid Effectiveness ◽  
Political Agenda ◽  
Annual Data ◽  
Political Regimes ◽  
Data Set ◽  
Content Type ◽  
The Government

Purpose This paper has examined the effectiveness of foreign aid on Ghanaian economy under different political regimes. Design/methodology/approach Using vector error correction and co-integration models on the annual data set over a period of 35 years, the authors demonstrate that foreign aid has had varied impacts on economic growth depending on the political ideology of the government in power. Findings With capitalist political philosophy, foreign aid improves private sector growth through infrastructural development. On the other hand, a government with socialist philosophy applies most of its foreign aid in direct social interventions with the view of improving human capital. Thus, each political party is likely to seek foreign aid/grant that will support its political agenda. Overall, the results show that foreign aid has a positive impact on the growth of the Ghanaian economy when there is good macroeconomic environment. Practical implications This implies that the country experiences economic growth when there are sound economic policies to apply foreign aid. Originality/value The practical implication of the findings of this paper is that donor countries and agencies should consider the philosophy of the government in power while granting aid to recipient countries, especially in Africa. The results are robust to different proxies and models.

The drivers of economic growth in South Asia: evidence from a dynamic system GMM approach

2019 ◽  
Vol 46 (3) ◽  
pp. 564-577 ◽  
Author(s):  
Mohammad Mafizur Rahman ◽  
Rezwanul Hasan Rana ◽  
Suborna Barua
Keyword(s):  
Economic Growth ◽  
South Asia ◽  
Energy Use ◽  
Government Expenditure ◽  
Data Set ◽  
Content Type ◽  
Dynamic Estimation ◽  
One Step ◽  
Key Variables ◽  
Generalised Method Of Moments

Purpose The purpose of this paper is to explore the drivers of economic growth in South Asia region for the period of 1975–2016 using the World Bank data. Design/methodology/approach Panel corrected standard error (static estimation) approach and one-step system generalised method of moments (dynamic estimation) approach are used. Findings Both the static and dynamic estimations indicate that energy use, gross capital formation and remittances are the main drivers of economic growth in South Asian countries. The effects of all these variables are positive and significant. The extent of the effect of energy use is much higher than that of other two variables on the economic growth. A 1 per cent increase in the growth of energy consumption can expedite the gross domestic product growth by approximately 3 per cent in South Asia. However, the key variables, such as trade, government expenditure and foreign direct investment demonstrate no significant effect. Originality/value The current research is original in the sense that it investigated the issue with a new data set using improved econometric techniques. Moreover, in South Asia as a whole, this kind of study is totally absent, particularly with panel data of a large number of years. Furthermore, this study has taken into account the problem of heterogeneity and the biases created by cross-section dependence, which were mostly absent in previous studies. Therefore, the findings of this research are new contributions to the existing literature.

Financial development, human capital and its impact on economic growth of emerging countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aaqib Sarwar ◽  
Muhammad Asif Khan ◽  
Zahid Sarwar ◽  
Wajid Khan
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Financial Development ◽  
Emerging Economies ◽  
Generalized Method Of Moments ◽  
Emerging Countries ◽  
Data Set ◽  
Content Type ◽  
The World ◽  
The Impact

Purpose This paper aims to investigate the critical aspect of financial development, human capital and their interactive term on economic growth from the perspective of emerging economies. Design/methodology/approach Data set ranged from 2002 to 2017 of 83 emerging countries used in this research and collected from world development indicators of the World Bank. The two-step system generalized method of moments is used to conduct this research within the endogenous growth model while controlling time and country-specific effects. Findings The findings of the study indicate that financial development has a positive and significant effect on economic growth. In emerging countries, human capital also has a positive impact on economic growth. Financial development and human capital interactively affect economic growth for emerging economies positively and significantly. Research limitations/implications The data set is limited to 83 emerging countries of the world. The time period for the study is 2002 to 2017. Originality/value This research contributes to the existing literature on human capital, financial development and economic growth. Limited research has been conducted on the impact of financial development and human capital on economic growth.

Health investments and economic growth: a quantile regression approach

2018 ◽  
Vol 17 (2) ◽  
pp. 220-245 ◽  
Author(s):  
Francisca Rosendo Silva ◽  
Marta Simões ◽  
João Sousa Andrade
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Quantile Regression ◽  
Output Growth ◽  
Policy Implications ◽  
Infant Mortality Rate ◽  
Childhood Development ◽  
Lower Growth ◽  
Content Type ◽  
The Relationship

Purpose This study aims to analyse the relationship between health human capital and economic growth for a maximum sample of 92 countries over the period 1980-2010 taking into account countries’ heterogeneity by assessing how health variables affect different countries according to their position on the conditional growth distribution. Design/methodology/approach The paper estimates a growth regression applying the methodology proposed by Canay (2011) for regression by quantiles (Koenker, 1978, 2004, 2012a, 2012b) in a panel framework. Quantile regression analysis allows us to identify the growth determinants that present a non-linear relationship with growth and determine the policy implications specifically for underperforming versus over achieving countries in terms of output growth. Findings The authors’ findings indicate that better health is positively and robustly related to growth at all quantiles, but the quantitative importance of the respective coefficients differs across quantiles, in some cases, with the sign of the relationship greater for countries that recorded lower growth rates. These results apply to both positive (life expectancy) and negative (infant mortality rate, undernourishment) health status indicators. Practical implications Given the predominantly public nature of health funding, cuts in health expenditure should be carefully balanced even in times of public finances sustainability problems, particularly when growth slowdowns, as a decrease in the stock of health human capital could be particularly harmful for growth in under achievers. Additionally, the most effective interventions seem to be those affecting early childhood development that should receive from policymakers the necessary attention and resources. Originality/value This study contributes to the existing literature by answering the question of whether the growth effects of health human capital can differ in sign and/or magnitude depending on a country’s growth performance. The findings may help policymakers to design the most adequate growth promoting policies according to the behaviour of output growth.

Public debt, foreign direct investment and economic growth dynamics

2019 ◽  
Vol 14 (5) ◽  
pp. 769-791 ◽  
Author(s):  
Olugbenga Onafowora ◽  
Oluwole Owoye
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Public Debt ◽  
Unit Root ◽  
Variance Decomposition ◽  
Output Growth ◽  
Debt Management ◽  
Unique Contribution ◽  
Content Type ◽  
Positive Effects

Purpose The purpose of this paper is to examine the dynamic and long-run relationships among public debt, FDI and output growth in five individual Caribbean countries over the period 1975–2015. Design/methodology/approach Zivot and Andrews (1992) unit root test with structural break is used to examine the stationarity of the variables and then the autoregressive distributed lag bounds testing procedure is used to ascertain existence of cointegration among them. Finally, order-invariant generalized forecast error variance decomposition (GFEVD) is used to establish the strength of the causal relationship between the examined variables. Findings The results confirm that the examined variables are cointegrated. FDI, domestic investment, trade openness, human capital (HC) and institutional quality were found to have significantly positive effects on economic growth, while higher public debt and inflation rates hampered growth. GFEVD revealed unidirectional Granger causality running from FDI to economic growth in two countries; unidirectional causality from growth to FDI in two other countries; and bidirectional causality between growth and FDI in one other country. The results also indicate one-way causality from output growth to public debt in three countries and bidirectional causality between these two variables in two other countries. Practical implications The implication is that the Caribbean Governments may need to adopt effective debt management as a major policy and intensify efforts at utilizing loans obtained judiciously for human and capital projects that have direct positive net present value but, to secure strong and inclusive growth, these strategies must be linked to policies that enhance macroeconomic stability and the quality of their institutions, encourage capital inflows and domestic investments vis-à-vis domestic savings, and increase HC and trade earnings. Originality/value In contrast to extant studies of the public debt–FDI–output growth nexus, this study controls for the possibility of structural breaks in unit root tests along with performing bounds test for cointegration, variance decomposition analysis, Granger causality tests, and CUSUM and CUSUMSQ tests for the stability of the dynamic output growth model. This is a unique contribution to the existing literature, and highlights the originality value of this paper.

Even education has its limits: closing the wage gap

2015 ◽  
Vol 42 (5) ◽  
pp. 908-928 ◽  
Author(s):  
Gil S. Epstein ◽  
Dalit Gafni ◽  
Erez Siniver
Keyword(s):  
Ethnic Group ◽  
Work Experience ◽  
Wage Gap ◽  
Economic Outcomes ◽  
Data Set ◽  
Universities And Colleges ◽  
Content Type ◽  
Ethiopian Immigrants ◽  
Unique Data ◽  
Long Run

Purpose – Economic outcomes are compared for university graduates in Israel belonging to four different ethnic groups. A unique data set is used that includes all individuals who graduated with a first degree from universities and colleges in Israel between the years 1995 and 2008 and which tracks them for up to ten years from the year they graduated. The main finding is that education and experience appear to have a strong effect on earnings in the long run and that an ethnic group can improve its position relative to certain groups while there is no effect relative to other groups. The paper aims to discuss these issues. Design/methodology/approach – The authors consider three of the main factors determining the success of assimilation: size of the ethnic group; cultural differences between groups and skin color; and examine how these factors affect economic outcomes. The authors use a unique data set that includes all individuals who graduated with a first degree from universities and colleges in Israel between the years 1995 and 2008. Findings – The results obtained in this study show that on average native Jews attain the best economic outcomes, followed by FSU immigrants, Israeli Arabs and finally Ethiopian immigrants. Education and experience appear to have a strong effect on earnings in the long run. An ethnic group can improve its position relative to other groups as they accumulate work experience. Originality/value – This is the first time that the Ethiopian immigrants where taken into account.

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