Pub Date : 2023-03-15DOI: 10.1108/igdr-05-2022-0065
S. Bhadury, Satadru Das, Saurabh Ghosh, Pawan Gopalakrishnan
Purpose Rising crude oil prices are likely to have an asymmetric and nonlinear negative impact on GDP growth. The purpose of this paper is to ask the following questions: Does the effect of a crude price shock depend on the position of crude price cycle, i.e. is the effect of price shock larger/smaller in periods of already elevated crude price? And, does the effect of crude price shock depend on the position of the economy in the business cycle, i.e. does the crude price shock affect growth differentially in periods of low/high growth? Design/methodology/approach The authors use a local linear projection (LLP) model to examine the asymmetric impact of crude price on GDP growth in an environment of high crude price. Next, a quantile regression model is used to account for differential impact on growth around high and low growth periods. Findings Results from the LLP model show that when oil price is above $70, each additional percentage point of increase in oil price results in a 20 basis point (bps) drop in quarterly GDP growth rate on average. The impact is felt between the third and sixth quarters. When oil prices rise above $80, the impact is similar, with a sharper drop in growth (30 bps). The exercise with quantile regression shows that the impact of an increase in crude prices on growth is almost double at lowest quantiles of growth compared with the median. Originality/value There is a growing literature that evaluates the impact of oil price in developing economies. However, nonlinearities in crude price-GDP growth dynamics have not received enough attention, especially during phases of elevated crude price or a growth downcycle. The authors believe that accounting for such effects is especially relevant in the present economic scenario of high oil prices because of geopolitical crises and a period of vulnerable growth because of supply chain issues arising out of the pandemic. Using recent data from oil-importing emerging market economies such as India, this paper fills a crucial gap in the literature.
{"title":"Impact of crude prices shock on GDP growth: using a linear, nonlinear and extreme value framework","authors":"S. Bhadury, Satadru Das, Saurabh Ghosh, Pawan Gopalakrishnan","doi":"10.1108/igdr-05-2022-0065","DOIUrl":"https://doi.org/10.1108/igdr-05-2022-0065","url":null,"abstract":"\u0000Purpose\u0000Rising crude oil prices are likely to have an asymmetric and nonlinear negative impact on GDP growth. The purpose of this paper is to ask the following questions: Does the effect of a crude price shock depend on the position of crude price cycle, i.e. is the effect of price shock larger/smaller in periods of already elevated crude price? And, does the effect of crude price shock depend on the position of the economy in the business cycle, i.e. does the crude price shock affect growth differentially in periods of low/high growth?\u0000\u0000\u0000Design/methodology/approach\u0000The authors use a local linear projection (LLP) model to examine the asymmetric impact of crude price on GDP growth in an environment of high crude price. Next, a quantile regression model is used to account for differential impact on growth around high and low growth periods.\u0000\u0000\u0000Findings\u0000Results from the LLP model show that when oil price is above $70, each additional percentage point of increase in oil price results in a 20 basis point (bps) drop in quarterly GDP growth rate on average. The impact is felt between the third and sixth quarters. When oil prices rise above $80, the impact is similar, with a sharper drop in growth (30 bps). The exercise with quantile regression shows that the impact of an increase in crude prices on growth is almost double at lowest quantiles of growth compared with the median.\u0000\u0000\u0000Originality/value\u0000There is a growing literature that evaluates the impact of oil price in developing economies. However, nonlinearities in crude price-GDP growth dynamics have not received enough attention, especially during phases of elevated crude price or a growth downcycle. The authors believe that accounting for such effects is especially relevant in the present economic scenario of high oil prices because of geopolitical crises and a period of vulnerable growth because of supply chain issues arising out of the pandemic. Using recent data from oil-importing emerging market economies such as India, this paper fills a crucial gap in the literature.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44550981","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-07DOI: 10.1108/igdr-04-2022-0054
A. Majumder, Chayanika Mitra
Purpose Many aspects of well-being depend critically on individual-level expenditure and consumption. The Millennium Development Goals include the promotion of gender equality and the empowerment of women, which partly have to do with women’s access to resources within households. Many important questions in labour, public and development economics also hinge on the intra-household distribution of resources. This paper aims to estimate the resource shares within a household in the rural and urban sectors of West Bengal through a collective household model, where each household member has a specific utility function. The sharing rule parameters, that determine the apportionment of resources between members within a household, are estimated in an intra-household collective framework. The analysis is based on a system of log-quadratic Engel curves estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian National Sample Survey Office (NSSO) for rural and urban sectors separately for the state of West Bengal. Design/methodology/approach The sharing rule parameters (that determine the apportionment of resources between members) within a household are estimated in an intra-household collective framework as suggested by Dunbar et al. (2013). The analysis is based on a Quadratic Almost Ideal Demand System (QUAIDS) estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian NSSO. Findings In this paper, the authors estimate the sharing rule of total household expenditure between couples in a household in the state of West Bengal. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project. Originality/value This paper is an attempt to estimate the sharing rule for households using NSSO consumption expenditure data. This paper also highlights the intra household unequal resource allocation through the sharing rule. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classificat
{"title":"Estimation of sharing rule: an application of intra-household collective model on Indian data","authors":"A. Majumder, Chayanika Mitra","doi":"10.1108/igdr-04-2022-0054","DOIUrl":"https://doi.org/10.1108/igdr-04-2022-0054","url":null,"abstract":"\u0000Purpose\u0000Many aspects of well-being depend critically on individual-level expenditure and consumption. The Millennium Development Goals include the promotion of gender equality and the empowerment of women, which partly have to do with women’s access to resources within households. Many important questions in labour, public and development economics also hinge on the intra-household distribution of resources. This paper aims to estimate the resource shares within a household in the rural and urban sectors of West Bengal through a collective household model, where each household member has a specific utility function. The sharing rule parameters, that determine the apportionment of resources between members within a household, are estimated in an intra-household collective framework. The analysis is based on a system of log-quadratic Engel curves estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian National Sample Survey Office (NSSO) for rural and urban sectors separately for the state of West Bengal.\u0000\u0000\u0000Design/methodology/approach\u0000The sharing rule parameters (that determine the apportionment of resources between members) within a household are estimated in an intra-household collective framework as suggested by Dunbar et al. (2013). The analysis is based on a Quadratic Almost Ideal Demand System (QUAIDS) estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian NSSO.\u0000\u0000\u0000Findings\u0000In this paper, the authors estimate the sharing rule of total household expenditure between couples in a household in the state of West Bengal. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project.\u0000\u0000\u0000Originality/value\u0000This paper is an attempt to estimate the sharing rule for households using NSSO consumption expenditure data. This paper also highlights the intra household unequal resource allocation through the sharing rule. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classificat","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2023-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43934618","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-02DOI: 10.1108/igdr-08-2022-0094
Bijoy Kumar Dey, Gurudas Das, U. Paul
Purpose This paper aims to estimate the technical efficiency (TE) and its determinants in the handloom micro-enterprises of Assam (India) using the double-bootstrap data envelopment analysis (DEA) technique. Design/methodology/approach The study uses a random sample of 340 handloom micro-entrepreneurs from the three districts of Assam in India. The double-bootstrap DEA was used to calculate the TE and its determinants. Findings The findings reveal that handloom enterprises are only 60% technically efficient, suggesting room for improvement. The bootstrap truncated regression results demonstrate that the handloom firms’ TE is influenced by both entrepreneur-specific and firm-specific factors. Practical implications The implication lies in the fact that the management of a firm may figure out how much it can reduce its input utilization to produce the existing amount of output so that it can move along the TE ladder. Moreover, it can crosscheck the factors to weed out inefficiency. Originality/value This paper has made two significant contributions to the extant literature. Firstly, it fills the gap by way of accounting the TE of handloom micro-enterprises, which has so far been neglected. Secondly, it used the bootstrap approach, which otherwise is very rare in the discourse on the Indian manufacturing industry, let alone in the micro, small and medium scale enterprises sector.
{"title":"Technical efficiency and its determinants of handloom micro-enterprises in the Indian state of Assam: a two-stage double-bootstrap DEA approach","authors":"Bijoy Kumar Dey, Gurudas Das, U. Paul","doi":"10.1108/igdr-08-2022-0094","DOIUrl":"https://doi.org/10.1108/igdr-08-2022-0094","url":null,"abstract":"\u0000Purpose\u0000This paper aims to estimate the technical efficiency (TE) and its determinants in the handloom micro-enterprises of Assam (India) using the double-bootstrap data envelopment analysis (DEA) technique.\u0000\u0000\u0000Design/methodology/approach\u0000The study uses a random sample of 340 handloom micro-entrepreneurs from the three districts of Assam in India. The double-bootstrap DEA was used to calculate the TE and its determinants.\u0000\u0000\u0000Findings\u0000The findings reveal that handloom enterprises are only 60% technically efficient, suggesting room for improvement. The bootstrap truncated regression results demonstrate that the handloom firms’ TE is influenced by both entrepreneur-specific and firm-specific factors.\u0000\u0000\u0000Practical implications\u0000The implication lies in the fact that the management of a firm may figure out how much it can reduce its input utilization to produce the existing amount of output so that it can move along the TE ladder. Moreover, it can crosscheck the factors to weed out inefficiency.\u0000\u0000\u0000Originality/value\u0000This paper has made two significant contributions to the extant literature. Firstly, it fills the gap by way of accounting the TE of handloom micro-enterprises, which has so far been neglected. Secondly, it used the bootstrap approach, which otherwise is very rare in the discourse on the Indian manufacturing industry, let alone in the micro, small and medium scale enterprises sector.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2023-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46206962","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-02-27DOI: 10.1108/igdr-12-2021-0172
M. Gupta, P. Dutta
Purpose This study aims to introduce an education sector which transforms a part of unskilled labour into new skilled labour, and then show how the level of output of educational service is determined in the short-run equilibrium along with the level of output of two production sectors. This study also introduces intertemporal dynamics into the model assuming that all factor endowments grow over time, and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country. Design/methodology/approach This study considers a three sector open economy model to analyse the long-run economic effects of the anti-immigration policy adopted in the destination country on the general equilibrium of the source country. Findings If the education sector in the source country is more skilled labour intensive than the advanced production sector, then this anti-immigration policy would raise the capital unskilled labour ratio, skilled labour–unskilled labour ratio and the balanced endogenous growth rate in the new long-run equilibrium but would lower the gross rate of creation of new skilled labour there. Originality/value The authors want to analyse the effect of anti-immigration policy adopted in the destination country on the long-run balanced growth rate in the source country. The dynamic growth effect of anti-immigration policy cannot be studied in a static short-run equilibrium model, the authors also introduce intertemporal dynamics into the model assuming that all factor endowments grow over time and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.
{"title":"Long run effects of anti-immigration policy","authors":"M. Gupta, P. Dutta","doi":"10.1108/igdr-12-2021-0172","DOIUrl":"https://doi.org/10.1108/igdr-12-2021-0172","url":null,"abstract":"\u0000Purpose\u0000This study aims to introduce an education sector which transforms a part of unskilled labour into new skilled labour, and then show how the level of output of educational service is determined in the short-run equilibrium along with the level of output of two production sectors. This study also introduces intertemporal dynamics into the model assuming that all factor endowments grow over time, and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.\u0000\u0000\u0000Design/methodology/approach\u0000This study considers a three sector open economy model to analyse the long-run economic effects of the anti-immigration policy adopted in the destination country on the general equilibrium of the source country.\u0000\u0000\u0000Findings\u0000If the education sector in the source country is more skilled labour intensive than the advanced production sector, then this anti-immigration policy would raise the capital unskilled labour ratio, skilled labour–unskilled labour ratio and the balanced endogenous growth rate in the new long-run equilibrium but would lower the gross rate of creation of new skilled labour there.\u0000\u0000\u0000Originality/value\u0000The authors want to analyse the effect of anti-immigration policy adopted in the destination country on the long-run balanced growth rate in the source country. The dynamic growth effect of anti-immigration policy cannot be studied in a static short-run equilibrium model, the authors also introduce intertemporal dynamics into the model assuming that all factor endowments grow over time and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":"229 ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2023-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41309913","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose This study aims to explore the long-run equilibrium relationship between India’s real exchange rate and sectoral productivity trends using internationally comparable KLEMS databases on productivity for India, China, Euro area, the USA, the UK and Japan. Design/methodology/approach This study uses pooled mean group estimations for panel data suggested by Pesaran et al. (1999). This method is chosen because of the presence of variables with different orders of integration. Findings The results find support for an “extended” Balassa–Samuelson (BS) hypothesis which allows labour market frictions that does not allow for wage equalisation between traded and non-traded sectors within a country. This mechanism continues to find some support when we separate out distribution sector that comprises wholesale and retail trade in the domestic services sector. The empirical evidence suggests that India’s real exchange rate is anchored to domestic fundamentals and is closely aligned to its fair value over a medium to long-time horizon. Originality/value To the best of the authors’ knowledge, unlike the available literature, which uses aggregate per-capita income as proxy for a country’s productivity growth, this paper perhaps makes the first attempt to validate the BS hypothesis by accounting for productivity differential at the sectoral levels using KLEMS data across countries. Moreover, this study takes the country’s productivity improvement rather than using a basket of countries, a prevalent practice in the literature. While this paper uses India’s data, which witnessed a prolonged appreciation in its real effective exchange rate and rapid technological progress, the authors believe its findings and policy implications could be applicable to the similar emerging market economies.
{"title":"Productivity and real exchange rates for India: does Balassa-Samuelson effect explain?","authors":"Saurabh Ghosh, Siddhartha Nath, Sauhard Srivastava","doi":"10.1108/igdr-11-2022-0130","DOIUrl":"https://doi.org/10.1108/igdr-11-2022-0130","url":null,"abstract":"\u0000Purpose\u0000This study aims to explore the long-run equilibrium relationship between India’s real exchange rate and sectoral productivity trends using internationally comparable KLEMS databases on productivity for India, China, Euro area, the USA, the UK and Japan.\u0000\u0000\u0000Design/methodology/approach\u0000This study uses pooled mean group estimations for panel data suggested by Pesaran et al. (1999). This method is chosen because of the presence of variables with different orders of integration.\u0000\u0000\u0000Findings\u0000The results find support for an “extended” Balassa–Samuelson (BS) hypothesis which allows labour market frictions that does not allow for wage equalisation between traded and non-traded sectors within a country. This mechanism continues to find some support when we separate out distribution sector that comprises wholesale and retail trade in the domestic services sector. The empirical evidence suggests that India’s real exchange rate is anchored to domestic fundamentals and is closely aligned to its fair value over a medium to long-time horizon.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, unlike the available literature, which uses aggregate per-capita income as proxy for a country’s productivity growth, this paper perhaps makes the first attempt to validate the BS hypothesis by accounting for productivity differential at the sectoral levels using KLEMS data across countries. Moreover, this study takes the country’s productivity improvement rather than using a basket of countries, a prevalent practice in the literature. While this paper uses India’s data, which witnessed a prolonged appreciation in its real effective exchange rate and rapid technological progress, the authors believe its findings and policy implications could be applicable to the similar emerging market economies.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2023-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42864717","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-10DOI: 10.1108/igdr-01-2022-0008
Vandana Sehgal
Purpose
This study aims to evaluate the effectiveness of crop diversification in increasing the income of farm households. In addition, this study introduces the impact of natural disasters in the analysis to determine how diversification helps mitigate the negative effect of disasters on farm income. More importantly, the study also analyses the effect of diversification on farm income by farm class to see where the benefits of diversification are concentrated.
Design/methodology/approach
This study uses a linear model, in which agricultural income is expressed as a function of diversification, natural disasters and several control variables. Diversification is measured using the Simpson index of diversification. The linear model is enhanced with the inclusion of an interaction term of natural disasters with the diversification index to shed light on the role of diversification in negating their harmful effect on agricultural income. Finally, to analyze the impact of institutional variables on farm income, the interactions of diversification with irrigation, insurance, usage of technical information and formal training are incorporated in the linear model.
Findings
The study highlights the importance of demographic, farm and institutional variables in raising farm income. The study suggests that an increase in education level, irrigation, usage of technical information and possession of Kisan Credit Card (KCC) have a positive impact on agricultural income. The study reveals that crop diversification has a positive impact on farm income and the benefits of diversification are conditioned by institutional factors. Thus, there is a need for policy intervention to ensure increased irrigation facilities along with extension services to provide information to the farm households. It has been found that small farmers gain more from crop diversification than larger farmers. Furthermore, the results show that natural disasters negatively impact farm income, but their impact can be mitigated by higher levels of diversification.
Originality/value
The results of the study are based on the recent unit-level data from the 77th Round of the National Sample Survey Office survey. The survey covers a large number of farm households and reports information for the year 2018–2019.
{"title":"Crop diversity and farm income: evidence from a large-scale national survey","authors":"Vandana Sehgal","doi":"10.1108/igdr-01-2022-0008","DOIUrl":"https://doi.org/10.1108/igdr-01-2022-0008","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to evaluate the effectiveness of crop diversification in increasing the income of farm households. In addition, this study introduces the impact of natural disasters in the analysis to determine how diversification helps mitigate the negative effect of disasters on farm income. More importantly, the study also analyses the effect of diversification on farm income by farm class to see where the benefits of diversification are concentrated.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study uses a linear model, in which agricultural income is expressed as a function of diversification, natural disasters and several control variables. Diversification is measured using the Simpson index of diversification. The linear model is enhanced with the inclusion of an interaction term of natural disasters with the diversification index to shed light on the role of diversification in negating their harmful effect on agricultural income. Finally, to analyze the impact of institutional variables on farm income, the interactions of diversification with irrigation, insurance, usage of technical information and formal training are incorporated in the linear model.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The study highlights the importance of demographic, farm and institutional variables in raising farm income. The study suggests that an increase in education level, irrigation, usage of technical information and possession of Kisan Credit Card (KCC) have a positive impact on agricultural income. The study reveals that crop diversification has a positive impact on farm income and the benefits of diversification are conditioned by institutional factors. Thus, there is a need for policy intervention to ensure increased irrigation facilities along with extension services to provide information to the farm households. It has been found that small farmers gain more from crop diversification than larger farmers. Furthermore, the results show that natural disasters negatively impact farm income, but their impact can be mitigated by higher levels of diversification.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The results of the study are based on the recent unit-level data from the 77th Round of the National Sample Survey Office survey. The survey covers a large number of farm households and reports information for the year 2018–2019.</p><!--/ Abstract__block -->","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":"65 s92","pages":""},"PeriodicalIF":1.4,"publicationDate":"2022-11-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138495062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-22DOI: 10.1108/igdr-11-2021-0152
M. Chakrabarty, Subhankar Mukherjee
Purpose The purpose of this paper is to estimate the impact of the COVID-19 pandemic on the patterns of convergence/divergence among the districts in India. Specifically, this paper investigates if the impact is heterogeneous among different cohorts of districts (based on income distribution). The differential impact may lead to heterogeneous long-run growth paths, resulting in unbalanced development across regions within the country. A study of convergence can ascertain the possible trajectory of such development across regions. Investigation of this phenomenon is the primary aim of this study. Design/methodology/approach This paper uses the panel regression method for estimation. This paper uses high-frequency nighttime light intensity data as a proxy for aggregate output. Findings The authors observe a significant reduction in the convergence rate as a result of the pandemic. Across the cluster of districts, the drop in ß-convergence rate, compared to the pre-pandemic period, varied from approximately 33% for the poorer districts to close to zero for the richest group of districts. These findings suggest that the pandemic may lead to a wider disparity among different regions within the country. Originality/value This paper contributes to the literature in the following ways. First, to the best of the authors’ knowledge, this is the first paper to investigate the impact of COVID-19 on the convergence rate. A detailed look into the possible disparity in convergence among various regions is critical because a larger drop in convergence, especially among the poorer regions, may call for policy attention to attain long-term equitable development. The authors perform this exercise by dividing the districts into four quantile groups based on the distribution of night-light intensity. Second, while previous studies on convergence using nighttime light data have used a cross-sectional approach, this study is possibly the first attempt to use the panel regression method on this data. The application of this method can be useful in tackling district-level omitted variables bias. Finally, the heterogeneity analysis using different quantiles of the distribution of night-light intensity may help in designing targeted policies to mitigate the disparity across districts due to the shock.
{"title":"Impact of COVID-19 on convergence in Indian districts","authors":"M. Chakrabarty, Subhankar Mukherjee","doi":"10.1108/igdr-11-2021-0152","DOIUrl":"https://doi.org/10.1108/igdr-11-2021-0152","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to estimate the impact of the COVID-19 pandemic on the patterns of convergence/divergence among the districts in India. Specifically, this paper investigates if the impact is heterogeneous among different cohorts of districts (based on income distribution). The differential impact may lead to heterogeneous long-run growth paths, resulting in unbalanced development across regions within the country. A study of convergence can ascertain the possible trajectory of such development across regions. Investigation of this phenomenon is the primary aim of this study.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses the panel regression method for estimation. This paper uses high-frequency nighttime light intensity data as a proxy for aggregate output.\u0000\u0000\u0000Findings\u0000The authors observe a significant reduction in the convergence rate as a result of the pandemic. Across the cluster of districts, the drop in ß-convergence rate, compared to the pre-pandemic period, varied from approximately 33% for the poorer districts to close to zero for the richest group of districts. These findings suggest that the pandemic may lead to a wider disparity among different regions within the country.\u0000\u0000\u0000Originality/value\u0000This paper contributes to the literature in the following ways. First, to the best of the authors’ knowledge, this is the first paper to investigate the impact of COVID-19 on the convergence rate. A detailed look into the possible disparity in convergence among various regions is critical because a larger drop in convergence, especially among the poorer regions, may call for policy attention to attain long-term equitable development. The authors perform this exercise by dividing the districts into four quantile groups based on the distribution of night-light intensity. Second, while previous studies on convergence using nighttime light data have used a cross-sectional approach, this study is possibly the first attempt to use the panel regression method on this data. The application of this method can be useful in tackling district-level omitted variables bias. Finally, the heterogeneity analysis using different quantiles of the distribution of night-light intensity may help in designing targeted policies to mitigate the disparity across districts due to the shock.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2022-09-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47076808","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-09DOI: 10.1108/igdr-07-2021-0082
Tilak Sanyal
Purpose Niehaus and Sukhtankar (2013a, 2013b) find that in response to an increase in the public wage rate in National Rural Employment Guarantee Act (NREGA), underpayment of wage and embezzlement rates increase monotonically. This paper aims to investigate theoretically whether the empirical finding of Niehaus and Sukhtankar (2013b) is valid in the long run. The author also verify whether their observation extends to the situation where multiple types of corruption coexist. Design/methodology/approach The author builds a theoretical model comprising of three individuals – a government official, a landlord and a representative worker. First, the author defines a no-corruption equilibrium where the official honestly reports the employment period to the government. In a two-stage game, the landlord announces the private wage rate in stage one, followed by the worker deciding on the allocation of time between private and public works and leisure. Then the author considers a single type of corruption where the official embezzles a part of public money by over-reporting the employment period. The landlord-worker game remains the same as before. Finally, the author considers multiple types of corruption where alongside embezzlement, the official takes a bribe from the worker for employing her. Here also, the author considers a two-stage game where in stage one, the official and landlord simultaneously determine embezzlement and bribe rates and the private wage rate, respectively. In stage two, the worker decides on the allocation of time. In both types of corruption, the probability of detection increases with the corruption rate. Findings In the case of a single type of corruption, the embezzlement rate behaves nonmonotonically in response to an increase in the public wage rate. A similar kind of result is obtained with multiple types of corruption as well. Originality/value First, to the best of the author’s knowledge, no paper prior to this has theoretically modeled corruption in NREGA. Also, the observations of Niehaus and Sukhtankar (2013a, 2013b) is neither valid in the long run nor extend to multiple corruptions.
{"title":"Corruption in NREGA: a theoretical analysis","authors":"Tilak Sanyal","doi":"10.1108/igdr-07-2021-0082","DOIUrl":"https://doi.org/10.1108/igdr-07-2021-0082","url":null,"abstract":"\u0000Purpose\u0000Niehaus and Sukhtankar (2013a, 2013b) find that in response to an increase in the public wage rate in National Rural Employment Guarantee Act (NREGA), underpayment of wage and embezzlement rates increase monotonically. This paper aims to investigate theoretically whether the empirical finding of Niehaus and Sukhtankar (2013b) is valid in the long run. The author also verify whether their observation extends to the situation where multiple types of corruption coexist.\u0000\u0000\u0000Design/methodology/approach\u0000The author builds a theoretical model comprising of three individuals – a government official, a landlord and a representative worker. First, the author defines a no-corruption equilibrium where the official honestly reports the employment period to the government. In a two-stage game, the landlord announces the private wage rate in stage one, followed by the worker deciding on the allocation of time between private and public works and leisure. Then the author considers a single type of corruption where the official embezzles a part of public money by over-reporting the employment period. The landlord-worker game remains the same as before. Finally, the author considers multiple types of corruption where alongside embezzlement, the official takes a bribe from the worker for employing her. Here also, the author considers a two-stage game where in stage one, the official and landlord simultaneously determine embezzlement and bribe rates and the private wage rate, respectively. In stage two, the worker decides on the allocation of time. In both types of corruption, the probability of detection increases with the corruption rate.\u0000\u0000\u0000Findings\u0000In the case of a single type of corruption, the embezzlement rate behaves nonmonotonically in response to an increase in the public wage rate. A similar kind of result is obtained with multiple types of corruption as well.\u0000\u0000\u0000Originality/value\u0000First, to the best of the author’s knowledge, no paper prior to this has theoretically modeled corruption in NREGA. Also, the observations of Niehaus and Sukhtankar (2013a, 2013b) is neither valid in the long run nor extend to multiple corruptions.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2022-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43736707","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-28DOI: 10.1108/igdr-07-2021-0092
Debaditya Mohanti, Souvik Banerjee
Purpose The present study aims to evaluate the aggregate consumption function from the perspective of the Euler equation using Indian macroeconomic data. Further, to examine the robustness of the findings for India, other developing nations are also studied. Design/methodology/approach Quarterly time-series data from 1996:1 to 2020:3 on consumption and income in India are used to evaluate the alternative model proposed by Campbell and Mankiw (1989). The alternative hypotheses in the present study are tested by estimating models using the instrumental variable approach. The lagged changes in the quarterly average of 91-day Treasury bill yields are used as the nominal interest rate instrumental variables along with other lagged instrumental variables. Findings The evidence presented in this study suggests that aggregate consumption is better explained when the permanent income model incorporates rule-of-thumb consumers, that is, individuals who consume their current income along with those who consume their permanent income. Practical implications The new rule-of-thumb framework better explains some of the observed phenomena, such as why the expected changes in consumption are related to the expected changes in income, why the expected changes in consumption are unrelated to real interest rates (i.e. why the intertemporal elasticity of substitution is near zero) and why a high consumption/income ratio is usually followed by an increase in income growth. Originality/value This study adds to the limited literature on the Euler-based consumption function in developing economies.
{"title":"Examining rule-of-thumb consumption behavior in India: a note","authors":"Debaditya Mohanti, Souvik Banerjee","doi":"10.1108/igdr-07-2021-0092","DOIUrl":"https://doi.org/10.1108/igdr-07-2021-0092","url":null,"abstract":"\u0000Purpose\u0000The present study aims to evaluate the aggregate consumption function from the perspective of the Euler equation using Indian macroeconomic data. Further, to examine the robustness of the findings for India, other developing nations are also studied.\u0000\u0000\u0000Design/methodology/approach\u0000Quarterly time-series data from 1996:1 to 2020:3 on consumption and income in India are used to evaluate the alternative model proposed by Campbell and Mankiw (1989). The alternative hypotheses in the present study are tested by estimating models using the instrumental variable approach. The lagged changes in the quarterly average of 91-day Treasury bill yields are used as the nominal interest rate instrumental variables along with other lagged instrumental variables.\u0000\u0000\u0000Findings\u0000The evidence presented in this study suggests that aggregate consumption is better explained when the permanent income model incorporates rule-of-thumb consumers, that is, individuals who consume their current income along with those who consume their permanent income.\u0000\u0000\u0000Practical implications\u0000The new rule-of-thumb framework better explains some of the observed phenomena, such as why the expected changes in consumption are related to the expected changes in income, why the expected changes in consumption are unrelated to real interest rates (i.e. why the intertemporal elasticity of substitution is near zero) and why a high consumption/income ratio is usually followed by an increase in income growth.\u0000\u0000\u0000Originality/value\u0000This study adds to the limited literature on the Euler-based consumption function in developing economies.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2022-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44358314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-09DOI: 10.1108/igdr-03-2021-0045
T. Khan, Mohd Shamim, Mohammad Azeem Khan
Purpose The purpose of this paper is to examine the optimal leverage ratio, speed of adjustment, and which factors contribute to achieving the target of selected telecom companies in a partial adjustment framework from 2008 to 2017. Further is to analyze the likelihood of bankruptcy of sample companies by Altman Z-Score model and to suggest which theory of capitals structure is better in explaining leverage strategies and judicious mix of debt and equity structure of the selected telecom companies. Design/methodology/approach This paper chooses a partial adjustment model and uses the generalized method of moments technique to identify the variables that influence the target leverage ratio and the factors that influence the speed at which the target leverage is adjusted. Second, the Altman Z-score model is used in this paper to research the financial status of telecom companies using financial instruments and techniques. Findings For Indian telecom firms, firm-specific variables such as profitability, NDTS and Z-score lead to greater debt adjustment towards optimal level target leverage. The paper also highlights new paradigms in the Indian telecom sector, stating that top market leaders such as Bharti Airtel, BSNL, Idea, Vodafone and R.com, among others, should focus on debt reduction and interest payments, as well as implement new strategies to solve the crisis and change financial policies. Research limitations/implications It mainly focuses on firm-specific variables because the firm-specific variables affect the leverage framework. The country-specific variables are not taken into the study. These results may be unique to telecom companies due to some peculiarities existing in the telecom sector in India. Although other sectors, both national and international level, can be taken into consideration. Practical implications This paper has ramifications for corporate executives, investors and policymakers in India, for example, in terms of considering different transition costs while changing a telecom company’s financing decisions. Originality/value To the best of the authors’ knowledge, this is the first paper of its kind to look at both financial and econometric tools to assess financial performance using the Altman Z-Score model, as well as decide leverage strategies and the pace with which they can be adjusted to target leverage in the context of Indian telecom companies.
{"title":"Leverage strategies of Indian telecom sector: a dynamic panel data approach","authors":"T. Khan, Mohd Shamim, Mohammad Azeem Khan","doi":"10.1108/igdr-03-2021-0045","DOIUrl":"https://doi.org/10.1108/igdr-03-2021-0045","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to examine the optimal leverage ratio, speed of adjustment, and which factors contribute to achieving the target of selected telecom companies in a partial adjustment framework from 2008 to 2017. Further is to analyze the likelihood of bankruptcy of sample companies by Altman Z-Score model and to suggest which theory of capitals structure is better in explaining leverage strategies and judicious mix of debt and equity structure of the selected telecom companies.\u0000\u0000\u0000Design/methodology/approach\u0000This paper chooses a partial adjustment model and uses the generalized method of moments technique to identify the variables that influence the target leverage ratio and the factors that influence the speed at which the target leverage is adjusted. Second, the Altman Z-score model is used in this paper to research the financial status of telecom companies using financial instruments and techniques.\u0000\u0000\u0000Findings\u0000For Indian telecom firms, firm-specific variables such as profitability, NDTS and Z-score lead to greater debt adjustment towards optimal level target leverage. The paper also highlights new paradigms in the Indian telecom sector, stating that top market leaders such as Bharti Airtel, BSNL, Idea, Vodafone and R.com, among others, should focus on debt reduction and interest payments, as well as implement new strategies to solve the crisis and change financial policies.\u0000\u0000\u0000Research limitations/implications\u0000It mainly focuses on firm-specific variables because the firm-specific variables affect the leverage framework. The country-specific variables are not taken into the study. These results may be unique to telecom companies due to some peculiarities existing in the telecom sector in India. Although other sectors, both national and international level, can be taken into consideration.\u0000\u0000\u0000Practical implications\u0000This paper has ramifications for corporate executives, investors and policymakers in India, for example, in terms of considering different transition costs while changing a telecom company’s financing decisions.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first paper of its kind to look at both financial and econometric tools to assess financial performance using the Altman Z-Score model, as well as decide leverage strategies and the pace with which they can be adjusted to target leverage in the context of Indian telecom companies.\u0000","PeriodicalId":42861,"journal":{"name":"Indian Growth and Development Review","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2022-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46956474","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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