Human capital, technological progress and trade: What explains India's long run growth?

Using data for the period 1950–2010, this paper seeks to explain the importance of human capital, technological progress, and trade in determining India's long run growth. This paper uses an improved growth accounting framework and ARDL-based co-integration techniques to identify the factors that drive long run productivity growth. The results suggest that both domestic technology capability building and foreign technology spillovers are important forces in determining India's long run growth. Human capital has turned out to be the most important factor. Trade plays a facilitating role by making available frontier technology in an embodied form from the rest-of-the-world. Although the analysis does not explicitly test any endogenous growth models, our findings are consistent with the recent endogenous growth literature.