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The "V-Factor": Distribution, Timing and Correlates of the Great Indian Growth Turnaround

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  • Chetan Ghate

    ()
    (Indian Statistical Institute)

  • Stephen Wright

    (University of London)

Abstract

Following Bai (2004) and Bai and Ng (2004) we estimate a common factor representation of a panel of output series for India, disaggregated by 15 states and 14 broad industry groups. We find that a single common "V-Factor" accounts for a large part of the significant shift in the cross-sectional distribution of state-sectoral output growth rates since the mid -1980s. The time profile of the V-Factor appears to be closely related to trade liberalization.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-010.

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Date of creation: 01 Feb 2009
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Handle: RePEc:jrp:jrpwrp:2009-010

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Keywords: Economic Growth; Factor Models; Principal Components; Convergence; Divergence; Indian States;

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  1. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, Elsevier, vol. 72(1), pages 57-89, October.
  2. Chetan Ghate, 2008. "Understanding divergence in India: a political economy approach," Journal of Economic Policy Reform, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(1), pages 1-9.
  3. Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
  4. Philippe Aghion & Robin Burgess & Stephen Redding & F Zilibotti, 2005. "The Unequal Effects of Liberalization: Evidence fromDismantling the License Raj in India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers, Suntory and Toyota International Centres for Economics 45, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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  6. Jushan Bai & Serena Ng, 2001. "A Panic Attack on Unit Roots and Cointegration," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 469, The Johns Hopkins University,Department of Economics.
  7. Ghate, Chetan & Wright, Stephen, 2012. "The “V-factor”: Distribution, timing and correlates of the great Indian growth turnaround," Journal of Development Economics, Elsevier, Elsevier, vol. 99(1), pages 58-67.
  8. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, Elsevier, vol. 48(2), pages 419-447, March.
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  11. Aditya Bhattacharjea, 2006. "Labour Market Regulation and Industrial Performance in India--A Critical Review of the Empirical Evidence," Working papers, Centre for Development Economics, Delhi School of Economics 141, Centre for Development Economics, Delhi School of Economics.
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  13. Dani Rodrik & Arvind Subramanian, 2005. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 193-228, September.
  14. Xavier X. Sala-i-Martin, 1997. "I Just Ran Four Million Regressions," NBER Working Papers 6252, National Bureau of Economic Research, Inc.
  15. Jushan Bai & Serena Ng, 2002. "Determining the Number of Factors in Approximate Factor Models," Econometrica, Econometric Society, Econometric Society, vol. 70(1), pages 191-221, January.
  16. Deb Kusum Das, 2003. "Quantifing trade barriers: Has protection declined substantially in Indian manufacturing?," Indian Council for Research on International Economic Relations, New Delhi Working Papers, Indian Council for Research on International Economic Relations, New Delhi, India 105, Indian Council for Research on International Economic Relations, New Delhi, India.
  17. Bai, Jushan, 2004. "Estimating cross-section common stochastic trends in nonstationary panel data," Journal of Econometrics, Elsevier, Elsevier, vol. 122(1), pages 137-183, September.
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  20. Chetan Ghate & Stephen Wright, 2011. "Correlates of statewise participation in the great Indian growth turnaround: some preliminary robustness results," Birkbeck Working Papers in Economics and Finance, Birkbeck, Department of Economics, Mathematics & Statistics 1104, Birkbeck, Department of Economics, Mathematics & Statistics.
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Cited by:
  1. Kevin S. Nell, 2013. "A Total Factor Productivity-Capital Accumulation Hypothesis of India’s Growth Transitions," CEF.UP Working Papers, Universidade do Porto, Faculdade de Economia do Porto 1313, Universidade do Porto, Faculdade de Economia do Porto.
  2. Chetan Ghate & Stephen Wright, 2011. "Correlates of statewise participation in the great Indian growth turnaround: some preliminary robustness results," Birkbeck Working Papers in Economics and Finance, Birkbeck, Department of Economics, Mathematics & Statistics 1104, Birkbeck, Department of Economics, Mathematics & Statistics.
  3. Castelló-Climent, Amparo & Mukhopadhyay, Abhiroop, 2013. "Mass education or a minority well educated elite in the process of growth: The case of India," Journal of Development Economics, Elsevier, Elsevier, vol. 105(C), pages 303-320.
  4. Sabyasachi Kar & Debajit Jha & Alpana Kateja, 2011. "Club-convergence and polarization of states: A nonparametric analysis of post-reform India," Indian Growth and Development Review, Emerald Group Publishing, Emerald Group Publishing, vol. 4(1), pages 53-72, April.
  5. Chetan Ghate & Stephen Wright, 2009. "The "V-Factor": Distribution, Timing and Correlates of the Great Indian Growth Turnaround," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2009-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  6. Kala Seetharam Sridhar & A. Venugopala Reddy, 2011. "Investment and Economic Opportunities: Urbanization, Infrastructure and Governance in The North and South of India," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 18(1), pages 1-46, June.
  7. Banerjee, Rajabrata & Roy, Saikat Sinha, 2014. "Human capital, technological progress and trade: What explains India's long run growth?," Journal of Asian Economics, Elsevier, Elsevier, vol. 30(C), pages 15-31.

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