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Determinants of Inter-state Differences in Industrial Labour Productivity: Exploring the Role of Innovative Efforts

In: Technology

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  • Savita Bhat

    (National Institute of Technology Karnataka (NITK))

Abstract

The neoclassical and new-Schumpeterian or evolutionary theories suggest that there is a relationship between technology and economic growth and development. The proponents of innovation systems approach attempt to understand how innovation affects economic development at national and regional level. They emphasize the role of institutions and interactions in promoting innovation led development. In the light of these theories, the objective of this paper is to empirically examine the role of innovative efforts in determining inter-state differences in industrial labour productivity defined as the ratio of industrial output to number of workers. The study specifically explores the role of state-level innovative efforts, represented in terms of the state-level patent applications filed, in determining the differences in industrial labour productivity for the bigger states in India. Other state-level measures on human capital and fixed capital investments are included as control variables in the analysis. The panel data regression uses data for three consecutive years, 2011, 2012 and 2013. Results of the econometric exercise indicate that after controlling for human capital and fixed capital, differences in innovative efforts do explain inter-state differences in industrial labour productivity.

Suggested Citation

  • Savita Bhat, 2016. "Determinants of Inter-state Differences in Industrial Labour Productivity: Exploring the Role of Innovative Efforts," India Studies in Business and Economics, in: N.S. Siddharthan & K. Narayanan (ed.), Technology, pages 17-26, Springer.
    • Handle: RePEc:spr:isbchp:978-981-10-1684-4_2
    DOI: 10.1007/978-981-10-1684-4_2
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