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Developing a Framework of Regional Competitiveness Using Macro and Microeconomic Factors and Evaluating Sources of Change in Regional Competitiveness in India Using Malmquist Productivity Index

Author

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  • Nirmalkumar Singh Moirangthem

    (Indian Institute of Technology Kharagpur)

  • Barnali Nag

    (Indian Institute of Technology Kharagpur)

Abstract

Many studies on measurement of regional competitiveness focus on outcome-based pyramidal and hat models of Lengyel (2004) and Martin (2003) respectively using revealed indicators like per capita income, labour productivity and employment rate. On the other hand, Porter’s (1990) diamond model focuses on foundational microeconomic factors of competitiveness. This study comprises of two objectives; first, to develop a new framework of extended Diamond based Pyramid of regional competitiveness by integrating the two, and second, to assess sources of change in regional competitiveness for 32 states/union territories of India. For this, Malmquist productivity index (MPI) framework has been used, treating per capita net state domestic product as output and six factors of regional competitiveness developed from first part of the study as inputs. Results show that regional competitiveness is almost singularly driven by the frontier shift component of MPI, while there is negligible contribution of efficiency change. This is interpreted as states benefitting more from better collective knowhow and resources of competitiveness provided by the economic environment in general. However, the states are not able to correct the individual inefficiencies compared to their most efficient peers.

Suggested Citation

  • Nirmalkumar Singh Moirangthem & Barnali Nag, 2020. "Developing a Framework of Regional Competitiveness Using Macro and Microeconomic Factors and Evaluating Sources of Change in Regional Competitiveness in India Using Malmquist Productivity Index," International Journal of Global Business and Competitiveness, Springer, vol. 15(2), pages 61-79, December.
    • Handle: RePEc:spr:ijogbc:v:15:y:2020:i:2:d:10.1007_s42943-020-00016-2
    DOI: 10.1007/s42943-020-00016-2
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    More about this item

    Keywords

    Regional competitiveness; Porter diamond model; Malmquist productivity index; Factors of competitiveness; State domestic product; India;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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