Regional divergence and club convergence in India

Madhusudan Ghosh, Atanu Ghoshray, Issam Malki

Research output: Contribution to journalArticle

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Abstract

This paper examines regional divergence in income across different states in India, and estimates convergence clubs endogenously. The paper makes two useful contributions. First, the data is analyzed using a novel method due to Phillips and Sul (2007) leading to different conclusions in comparison to past studies, and secondly sectoral level data is employed which to our knowledge has not been employed in the literature before. Applying the novel approach to panel data relating to fifteen major states of India for the period 1968/69–2008/09, the results display significant divergence in per capita income across states at the aggregate and sectoral levels. There is also evidence of convergence clubs and variations in the number and composition of clubs across sectors. While three clubs are identified at the aggregate level, at the sectoral level we find three clubs in the industrial sector, two clubs are identified in both the agriculture and services sectors. The final part of the paper deals with the policy implications.
LanguageEnglish
Pages733-742
Number of pages10
JournalEconomic Modelling
Volume30
Issue number1
DOIs
StatusPublished - Jan 2013

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India
Clubs
Divergence
Club convergence
Convergence clubs
Industrial sector
Service sector
Panel data
Per capita income
Policy implications
Agriculture
Income

Cite this

Regional divergence and club convergence in India. / Ghosh, Madhusudan; Ghoshray, Atanu; Malki, Issam.

In: Economic Modelling, Vol. 30, No. 1, 01.2013, p. 733-742.

Research output: Contribution to journalArticle

Ghosh, Madhusudan ; Ghoshray, Atanu ; Malki, Issam. / Regional divergence and club convergence in India. In: Economic Modelling. 2013 ; Vol. 30, No. 1. pp. 733-742.
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