IDEAS home Printed from https://ideas.repec.org/a/eme/jespps/v39y2012i1p63-83.html
   My bibliography  Save this article

Constructing macroeconomic performance index of Indian states using DEA

Author

Listed:
  • Biresh K. Sahoo
  • Debashis Acharya

Abstract

Purpose - The purpose of this paper is to construct a robust macroeconomic performance (MEP) index of the State economies of an emerging market economy, i.e. India. Design/methodology/approach - Two variants of data envelopment analysis (DEA) models – radial and non‐radial – are proposed to construct the macroeconomic policy performance of 22 Indian State economies in the post‐economic reforms era covering the period: 1994‐1995 to 2001‐2002, using three macroeconomic indicators: growth in gross state domestic product, price stability, and fiscal deficit. Findings - The authors' three broad empirical findings are: first, the radial and non‐radial DEA models yield significantly different rankings of State economies in terms of their MEP index scores; second, as against the use of only growth in gross state domestic product and price stability for MEP measure, the inclusion of fiscal deficit as an additional indicator yields a noticeable improvement not only in the State MEP index scores, but also in their rankings, thus providing the evidence of relatively successful attempt by the Indian States in reducing fiscal deficit, in general, and legislating FRBM bill, in particular; and third, a positive significant correlation between foreign direct investment (FDI) and MEP indicates that a State's overall macroeconomic policy performance does matter to attract FDI. Research limitations/implications - Since the DEA models employed in this study ignore the possibility of asymmetric shocks, the MEP results might be questioned in this deterministic setting. However, the study period has been smooth and has not been subject to any major changes in the State economic policies. Therefore, the MEP results might not be susceptible such changes. However, further research is desired on examining the macroeconomic policy performance behavior of Indian States using bootstrapping DEA. Originality/value - None of the past Indian studies were able to give a comprehensive picture concerning the MEP behavior of Indian State economies, since the methodologies adopted in those studies were not suitable to take into consideration all the macro indicators at a time. Therefore, this present study is considered the first of its kind in assessing the MEP index of the Indian State economies by simultaneously considering all the macro indicators.

Suggested Citation

  • Biresh K. Sahoo & Debashis Acharya, 2012. "Constructing macroeconomic performance index of Indian states using DEA," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 39(1), pages 63-83, January.
  • Handle: RePEc:eme:jespps:v:39:y:2012:i:1:p:63-83
    DOI: 10.1108/01443581211192116
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/01443581211192116/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.emerald.com/insight/content/doi/10.1108/01443581211192116/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1108/01443581211192116?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Biresh K Sahoo & Ramadhar Singh & Bineet Mishra & Krithiga Sankaran, 2015. "Research Productivity in Management Schools of India: A Directional Benefit-of-Doubt Model Analysis," Working Papers id:7139, eSocialSciences.
    2. Mehdiloozad, Mahmood & Sahoo, Biresh K. & Roshdi, Israfil, 2014. "A generalized multiplicative directional distance function for efficiency measurement in DEA," European Journal of Operational Research, Elsevier, vol. 232(3), pages 679-688.
    3. Biswajit Mohanty & N. R. Bhanumurthy, 2018. "Regional growth policy experience in India: the spatial dimension," Asia-Pacific Journal of Regional Science, Springer, vol. 2(2), pages 479-505, August.
    4. Juan Aparicio & Magdalena Kapelko & Juan F. Monge, 2020. "A Well-Defined Composite Indicator: An Application to Corporate Social Responsibility," Journal of Optimization Theory and Applications, Springer, vol. 186(1), pages 299-323, July.
    5. Gabriel Villa & Sebastián Lozano, 2016. "DEA with non-monotonic variables. Application to EU governments’ macroeconomic efficiency," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(12), pages 1510-1523, December.
    6. Mohanty, Ranjan Kumar & Sahoo, Biresh K., 2017. "Examining the Eco-Macroeconomic Performance Index of India: A Data Envelopment Analysis Approach," Working Papers 17/202, National Institute of Public Finance and Policy.
    7. Ben Lahouel, Béchir & Ben Zaied, Younes & Taleb, Lotfi & Kočišová, Kristína, 2022. "The assessment of socio-environmental performance change: A Benefit of the Doubt indicator based on Directional Distance Function and Malmquist productivity index," Finance Research Letters, Elsevier, vol. 49(C).
    8. Rogge, Nicky & Archer, Geoffrey, 2021. "Measuring and analyzing country change in establishing ease of doing business using a revised version of World Bank's ease of doing business index," European Journal of Operational Research, Elsevier, vol. 290(1), pages 373-385.
    9. A. Zanella & A. Camanho & T. Dias, 2015. "The assessment of cities’ livability integrating human wellbeing and environmental impact," Annals of Operations Research, Springer, vol. 226(1), pages 695-726, March.
    10. Ram Pratap Sinha, 2021. "Indebtedness, Fiscal Discipline and Development Spending – A Non-parametric Approach," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 13(2), pages 147-173, June.
    11. Rezaei Soufi, Hojat & Esfahanipour, Akbar & Akbarpour Shirazi, Mohsen, 2022. "A quantitative approach for analysis of macroeconomic resilience due to socio-economic shocks," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    12. Chia-Chi Lee, 2014. "Performance evaluation of CPA firms in Taiwan from the perspective of industry-specific client groups," Service Business, Springer;Pan-Pacific Business Association, vol. 8(2), pages 267-293, June.
    13. Fusco, Elisa & Vidoli, Francesco & Sahoo, Biresh K., 2018. "Spatial heterogeneity in composite indicator: A methodological proposal," Omega, Elsevier, vol. 77(C), pages 1-14.
    14. Sahoo, Biresh K. & Singh, Ramadhar & Mishra, Bineet & Sankaran, Krithiga, 2017. "Research productivity in management schools of India during 1968-2015: A directional benefit-of-doubt model analysis," Omega, Elsevier, vol. 66(PA), pages 118-139.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:39:y:2012:i:1:p:63-83. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.