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The Services Sector in India's States: A Tale of Growth, Convergence and Trade

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  • Anirudh Shingal

Abstract

type="main" xml:id="twec12163-abs-0001"> India's success story in services is well documented at the national level, but similar literature does not exist for India's states. We bridge this gap by studying India's services growth at the sub-national level. Contrary to earlier commentary on the unsustainability of India's services growth process, our findings suggest that per capita services may be converging across Indian states (this is not true of per capita income); unlike previous studies on India, evidence is provided using both traditional sigma and beta-convergence measures and advanced panel unit root tests from the recent econometrics literature. A disaggregated analysis of services sectors reveals convergence in railways, public administration and financial services. Finally, a Jensen and Kletzer approach to determine tradability and an additional original methodology provide evidence of most services being ‘traded’ across India's states, suggesting the role of such trade in the services growth story even at the sub-national level.

Suggested Citation

  • Anirudh Shingal, 2014. "The Services Sector in India's States: A Tale of Growth, Convergence and Trade," The World Economy, Wiley Blackwell, vol. 37(12), pages 1773-1793, December.
    • Handle: RePEc:bla:worlde:v:37:y:2014:i:12:p:1773-1793
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    File URL: http://hdl.handle.net/10.1111/twec.2014.37.issue-12
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    Cited by:

    1. Uwitonze, Eric & Heshmati, Almas, 2016. "Service Sector Development and its Determinants in Rwanda," IZA Discussion Papers 10117, Institute of Labor Economics (IZA).
    2. John C. Anyanwu & Joanna C. Anyanwu, 2018. "Accounting for the Rising Value Added in Services Compared to That in Agriculture in African Economies," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 476-500, December.
    3. Shubin Yang & Sandra Lancheros & Chris Milner, 2021. "Technological Catch-up to the National and Regional Frontier: Firm-level Evidence for India," Journal of Development Studies, Taylor & Francis Journals, vol. 57(8), pages 1303-1320, August.
    4. Priyanka Dutta & Hemanta Barman, 2022. "Services sector growth and interstate income divergence in India," Asia-Pacific Journal of Regional Science, Springer, vol. 6(3), pages 995-1015, October.
    5. Anirudh Shingal, 2014. "Services globalization and sub-national demand linkages: The case of India," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-23.

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