Services Growth and Convergence: Getting India’s States Together

35 Pages Posted: 13 Oct 2010

See all articles by Anirudh Shingal

Anirudh Shingal

S.P. Jain Institute of Management & Research; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Bern - World Trade Institute

Date Written: October 1, 2010

Abstract

India’s success story in services is well documented at the national level, but similar literature does not exist for India’s states. In this paper, we bridge this gap in research by looking at India’s services growth at the sub-national level and in doing so, also challenge existing literature by arguing that this growth has positive implications for income distribution. The first interesting finding is that even as per capita income is not converging across India’s states, per capita services are and we provide evidence for this both in terms of traditional measures of sigma- and beta-convergence and more recent panel unit root tests. Secondly, not only is external demand an important determinant of services value added at the state level, but this demand also emanates from all over the country rather than being concentrated in the neighbouring or richer states. This suggests that the benefits from services growth are being distributed more widely than may be perceived.

Keywords: Services, India, states, growth, convergence, demand

JEL Classification: C23, O11, O53, R11

Suggested Citation

Shingal, Anirudh, Services Growth and Convergence: Getting India’s States Together (October 1, 2010). Available at SSRN: https://ssrn.com/abstract=1690162 or http://dx.doi.org/10.2139/ssrn.1690162

Anirudh Shingal (Contact Author)

S.P. Jain Institute of Management & Research ( email )

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European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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University of Bern - World Trade Institute ( email )

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