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Regional Openness, Income Growth and Disparity during 1980–2009

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  • Dibyendu Maiti
  • Sugata Marjit

Abstract

As a country progressively engages in international trade, its factors of production increasingly enter into the export sector, where their return is higher compared to the import-competing sector. At the regional level too, those states which can attune their production structure to international demands earn more from trade than other states, and also grow at a faster rate. A regional openness index has been reconstructed by combining the export and import intensities of the states, ranks of correlation of state production shares, respectively, with tradable production share as suitable weights at the state level. The index is highly influenced by the institutional variation across states in a federal setting. The per capita net state domestic products have been growing in all major states in India during the period 1980–2009, but at different rates, and one of the detrimental factors for this has been regional openness.

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  • Dibyendu Maiti & Sugata Marjit, 2015. "Regional Openness, Income Growth and Disparity during 1980–2009," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(1), pages 145-166, March.
    • Handle: RePEc:sae:soueco:v:16:y:2015:i:1:p:145-166
    DOI: 10.1177/1391561415575137
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    More about this item

    Keywords

    Regional openness index; trade; growth; disparity; Indian states; trade costs;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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