Did productivity converge in manufacturing sector across Indian states?

Rath, Badri Narayan and Madheswaran, S (2010) Did productivity converge in manufacturing sector across Indian states? Regional and Sectoral Economic Studies, 10 (2). pp. 93-108. ISSN 1578-4460

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Abstract

This paper aims to explore the labour productivity convergence in manufacturing sector across fifteen major Indian states during 1979-80 to 2000-01, using cross-section analysis. The analysis examines the convergence hypothesis taking both absolute and conditional convergence into consideration. The results indicate that though absolute β convergence in labour productivity does not exist during overall period of analysis, labour productivity does converge in pre-reform period. Analyzing conditional convergence using dynamic panel model, we find that labour productivity in rich states grew faster with reasonably high initial productivity levels, indicating a divergence across the states. In light of the above-affirmed empirical results, the study suggests that better endeavors for productivity growth of manufacturing sector in backward states are quite essential. The government should give more emphasize to the labour intensive manufacturing industries which can absorb the mass un-skilled labour force in eastern and northern states of India.

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IITH Creators:
IITH CreatorsORCiD
Rath, Badri Narayanhttp://orcid.org/0000-0001-7211-0952
Item Type: Article
Uncontrolled Keywords: Convergence; Dynamic panel model; Indian manufacturing; Labour productivity
Subjects: Arts > Liberal arts
Depositing User: Mr. Siva Shankar K
Date Deposited: 13 Oct 2014 05:43
Last Modified: 11 Sep 2017 06:57
URI: http://raiith.iith.ac.in/id/eprint/195
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