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The interplay between growth and development: evidence from Indian districts

Author

Listed:
  • Jyoti Prasad Mukhopadhyay

    (corresponding author, PhD scholar, Institute for Financial Management Research (IFMR), 24 Kothari Road, Chennai, India)

  • Nilanjan Banik

    (Professor, Institute for Financial Management Research (IFMR), 24 Kothari Road, Chennai, India)

Abstract

In this paper we examine the nexus between growth and development using a recursive structural equation system which, to the best of our knowledge, has not been tried so far to examine such relationships in the Indian context. Another novel feature of our study is that we use district-level data to capture greater heterogeneity at a substate level. We use the growth rate of per capita income (PCI) as an indicator of economic growth, and the infant mortality rate (IMR) and literacy rate as the development outcomes. We find that IMR and literacy rate have a positive and statistically significant effect on the growth rate of PCI. Our results also show that the growth rate of PCI has a positive and statistically significant effect on IMR and the literacy rate. Further sensitivity analysis is performed to test the robustness of these findings.

Suggested Citation

  • Jyoti Prasad Mukhopadhyay & Nilanjan Banik, 2013. "The interplay between growth and development: evidence from Indian districts," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 20(2), pages 109-127, December.
    • Handle: RePEc:unt:jnapdj:v:20:y:2013:i:2:p:109-127
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    More about this item

    Keywords

    Growth; development; structural equation system; seemingly unrelated regressions (SUR) Model;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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