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Panel data analysis: convergence of Indian states with infrastructure

Author

Listed:
  • Flora Pandya

    (University of Mumbai)

  • Suresh Maind

    (University of Mumbai)

Abstract

Augmented Solow model neoclassical growth theory framework is used with infrastructure. The poor economies tend to grow more because of diminishing returns to capital. The idea of conditional convergence used by Barro and Sala-i-Martin for the β-convergence of the steady state equilibrium is used for the Indian States and Union Territories with the infrastructure index. The panel data set is used for the analysis as it has more advantages over the cross section and time series data. The dynamic panel data are estimated using the fixed effect model and generalized methods of moments for the estimation for the period of 1990–1991 to 2010–2011. The dynamic panel data models are more consistent and efficient estimator with the generalized methods of moments than the fixed effect models. The infrastructure index and growth have significant positive relationship. The Barro and Sala-i-Martin version of the β-convergence holds for the Indian States and Union Territories a clear evidence of conditional convergence.

Suggested Citation

  • Flora Pandya & Suresh Maind, 2017. "Panel data analysis: convergence of Indian states with infrastructure," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 19(1), pages 181-195, April.
    • Handle: RePEc:spr:jsecdv:v:19:y:2017:i:1:d:10.1007_s40847-017-0033-3
    DOI: 10.1007/s40847-017-0033-3
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    References listed on IDEAS

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    Cited by:

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    2. Rawat, Pankaj S. & Sharma, Seema, 2021. "TFP growth, technical efficiency and catch-up dynamics: Evidence from Indian manufacturing," Economic Modelling, Elsevier, vol. 103(C).

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    More about this item

    Keywords

    Infrastructure index; Fixed effect; Generalized methods of moments; Conditional convergence;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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