The Indian Economic Journal, Ahead of Print.
Category Archives: The Indian Economic Journal
Editorial
The Indian Economic Journal, Volume 72, Issue 2, Page 205-206, March 2024.
Evaluating Public Spending Efficiency and its Determinants Towards Social Outcomes: Empirical Evidence from Indian States
The Indian Economic Journal, Ahead of Print.
The topic of public expenditure efficiency has gained a key position in the spheres of public policy goals. This article tries estimating the efficiency of public spending on health and education sectors across Indian states from 1990–1991 to 2016–2017. In input–output linkage, we have computed efficiency using a slacks-based measure model of data envelopment analysis through different orientations. The study also captures the externalities of public spending efficiency with some exogenous factors. It also suggests that these exogenous factors (such as good governance, per capita income and proportion of literates in the household) have significantly improved the output efficiency score of the health as well as the education sectors across Indian states.JEL Codes: H51, H52, H21, E61
The topic of public expenditure efficiency has gained a key position in the spheres of public policy goals. This article tries estimating the efficiency of public spending on health and education sectors across Indian states from 1990–1991 to 2016–2017. In input–output linkage, we have computed efficiency using a slacks-based measure model of data envelopment analysis through different orientations. The study also captures the externalities of public spending efficiency with some exogenous factors. It also suggests that these exogenous factors (such as good governance, per capita income and proportion of literates in the household) have significantly improved the output efficiency score of the health as well as the education sectors across Indian states.JEL Codes: H51, H52, H21, E61
Stock Market Integration Through Internationally Tradable Assets
The Indian Economic Journal, Ahead of Print.
The study examines the influence of tradable assets in integrating the Indian stock market with global stock markets. The movement in the foreign indices has a direct spillover effect on the assets cross-listed on these exchanges in the form of American depository receipts and global depositary receipts, and the effect is simultaneously shifted to the domestic market index due to the dual listing of domestic assets. The findings of the study indicate that there is a prolonged effect of all markets combined on the Indian market during the period, and that the long-term effect between the Indian and US markets is also consistent in the long run, while the Wald test also supports the presence of a short-term effect between the Indian and US markets. Long-term and short-term causation patterns are lacking in the Luxembourg market, illustrating the partial integration of the financial markets. The present study is instrumental for investors in identifying exogenous markets for portfolio diversification, thus enabling businesses to have a global reach.JEL Codes:J C32, C58, D53
The study examines the influence of tradable assets in integrating the Indian stock market with global stock markets. The movement in the foreign indices has a direct spillover effect on the assets cross-listed on these exchanges in the form of American depository receipts and global depositary receipts, and the effect is simultaneously shifted to the domestic market index due to the dual listing of domestic assets. The findings of the study indicate that there is a prolonged effect of all markets combined on the Indian market during the period, and that the long-term effect between the Indian and US markets is also consistent in the long run, while the Wald test also supports the presence of a short-term effect between the Indian and US markets. Long-term and short-term causation patterns are lacking in the Luxembourg market, illustrating the partial integration of the financial markets. The present study is instrumental for investors in identifying exogenous markets for portfolio diversification, thus enabling businesses to have a global reach.JEL Codes:J C32, C58, D53
Asymmetrical Effects of Global Liquidity and Global Economic Output on Domestic Economic Growth: Evidence from India based on NARDL Approach
The Indian Economic Journal, Ahead of Print.
The augment of economic globalisation and financial integration in the past few decades has changed the dynamics of international developments. This has resulted in discussions on the immediate and frequent impact of global factors on emerging and developing economies. The objective of this research is to determine how the global economy’s output and liquidity affect India’s economic growth. The period of the study chosen is from 2000 to 2019 (quarterly). The empirical findings from the application of the NARDL approach suggest that the increase in global economic output increases domestic growth. Domestic economic growth is boosted by rising global liquidity, but both falling global liquidity and falling global economic production have no statistically significant results.JEL Codes: B22, C32, F21, F36, F43
The augment of economic globalisation and financial integration in the past few decades has changed the dynamics of international developments. This has resulted in discussions on the immediate and frequent impact of global factors on emerging and developing economies. The objective of this research is to determine how the global economy’s output and liquidity affect India’s economic growth. The period of the study chosen is from 2000 to 2019 (quarterly). The empirical findings from the application of the NARDL approach suggest that the increase in global economic output increases domestic growth. Domestic economic growth is boosted by rising global liquidity, but both falling global liquidity and falling global economic production have no statistically significant results.JEL Codes: B22, C32, F21, F36, F43
Determinants of Export in Boom and Bust: Evidence from the Indian Electronics Industry
The Indian Economic Journal, Ahead of Print.
India’s exports of electronics products underwent two major phases after 2000–2001. A boom phase from 2000–2001 to 2008–2009, where growth of Indian electronic exports increased significantly, and a bust phase from 2009–2010 to 2019–2020, with drastic decline in its growth. This gives us an opportunity to estimate and compare the factors that help firms to sustain exports in different phases of export growth. Using firm-level panel data and instrumental variable Tobit (IVTobit) model, this study shows that during the boom period, firms’ spending on research and development (R&D), imported technology and raw materials explain their exports. Firms’ age and multinational enterprises (MNEs) affiliation are also important for export in this phase. In the bust period, along with firms’ age, import of technology and raw materials, domestic raw materials, size, advertisement expenses and production efficiency of firms have emerged as important factors in determining export. These finding suggests that larger firms with high technical efficiency manage to export even during the bust period. Moreover, to export during the bust period, firms need to spend on domestic raw material, import of technologies and promotion of their products rather than spending on R&D activities.JEL Codes: F440, L6, L63, F140, L250, C240, C260
India’s exports of electronics products underwent two major phases after 2000–2001. A boom phase from 2000–2001 to 2008–2009, where growth of Indian electronic exports increased significantly, and a bust phase from 2009–2010 to 2019–2020, with drastic decline in its growth. This gives us an opportunity to estimate and compare the factors that help firms to sustain exports in different phases of export growth. Using firm-level panel data and instrumental variable Tobit (IVTobit) model, this study shows that during the boom period, firms’ spending on research and development (R&D), imported technology and raw materials explain their exports. Firms’ age and multinational enterprises (MNEs) affiliation are also important for export in this phase. In the bust period, along with firms’ age, import of technology and raw materials, domestic raw materials, size, advertisement expenses and production efficiency of firms have emerged as important factors in determining export. These finding suggests that larger firms with high technical efficiency manage to export even during the bust period. Moreover, to export during the bust period, firms need to spend on domestic raw material, import of technologies and promotion of their products rather than spending on R&D activities.JEL Codes: F440, L6, L63, F140, L250, C240, C260
Impact of Climate Change on Agriculture: Evidence from Major Crop Production in India
The Indian Economic Journal, Ahead of Print.
The study examines the impact of climatic changes on the production of the major crops grown in India. The study estimates the panel data from 1970 to 2020 by using the Panel Autoregressive Distributed Lag technique. The results of the study show that in the long run, maximum temperature has a negative impact on crop production, whereas carbon dioxide emissions have a positive impact on crop production. In the short run, maximum temperature and average precipitation positively affect crop production, whereas minimum temperature negatively affects the production of crops. Besides climatic variables, the study also incorporates non-climatic variable such as the area under crop. The results revealed that the area under crop has a positive significant effect on crop production both in the short run and long run.JEL Codes: C50, Q1, Q15, Q54
The study examines the impact of climatic changes on the production of the major crops grown in India. The study estimates the panel data from 1970 to 2020 by using the Panel Autoregressive Distributed Lag technique. The results of the study show that in the long run, maximum temperature has a negative impact on crop production, whereas carbon dioxide emissions have a positive impact on crop production. In the short run, maximum temperature and average precipitation positively affect crop production, whereas minimum temperature negatively affects the production of crops. Besides climatic variables, the study also incorporates non-climatic variable such as the area under crop. The results revealed that the area under crop has a positive significant effect on crop production both in the short run and long run.JEL Codes: C50, Q1, Q15, Q54
Identifying the Probability Distribution of Exchange Rates in Sri Lanka
The Indian Economic Journal, Ahead of Print.
The exchange rate is one of the main components that represents the status of a country’s economic condition. This study mainly focuses on identifying an appropriate distribution that can capture the asymmetric behaviour of important currency exchange rates related to Sri Lanka. The true behaviour of the exchange rates of USD, EURO, JPY, AUD, GBP, CHF, SGD and CAD in terms of LKR was determined using flexible distributions of generalised lambda distribution (GLD), Normal Inverse Gaussian and Skew-Normal. The parameter estimation was carried out by maximum likelihood estimation (MLE), while for GLD, few more parameter estimation techniques were applied. To understand how well the fitted distributions identify the real behaviour of data, we conducted the goodness-of-fit (GOF) tests. The results from Cramer–Von Mises (CvM) and Anderson–Darling (AD) GOF tests pointed out that the exchange rates data follow a GLD with the parameter estimation of maximum product of spacings (MPS). Further, plots of histograms with theoretical densities, cumulative distribution functions (CDFs) with empirical CDF and Quantile–Quantile plots illustrated the same idea. This study presented the findings based on different suitable parameter estimation techniques and this study is the first investigation on the distribution identification of exchange rates in Sri Lanka.JEL Codes: C12,C13,G10
The exchange rate is one of the main components that represents the status of a country’s economic condition. This study mainly focuses on identifying an appropriate distribution that can capture the asymmetric behaviour of important currency exchange rates related to Sri Lanka. The true behaviour of the exchange rates of USD, EURO, JPY, AUD, GBP, CHF, SGD and CAD in terms of LKR was determined using flexible distributions of generalised lambda distribution (GLD), Normal Inverse Gaussian and Skew-Normal. The parameter estimation was carried out by maximum likelihood estimation (MLE), while for GLD, few more parameter estimation techniques were applied. To understand how well the fitted distributions identify the real behaviour of data, we conducted the goodness-of-fit (GOF) tests. The results from Cramer–Von Mises (CvM) and Anderson–Darling (AD) GOF tests pointed out that the exchange rates data follow a GLD with the parameter estimation of maximum product of spacings (MPS). Further, plots of histograms with theoretical densities, cumulative distribution functions (CDFs) with empirical CDF and Quantile–Quantile plots illustrated the same idea. This study presented the findings based on different suitable parameter estimation techniques and this study is the first investigation on the distribution identification of exchange rates in Sri Lanka.JEL Codes: C12,C13,G10
An Empirical Study of the Implications of Service Sector Growth for Output Growth in Bangladesh
The Indian Economic Journal, Ahead of Print.
Due to the growing importance of Bangladesh’s service economy and the country’s expanding industrial sector, strengthening the service sector has become a primary objective. Given the size and interconnectedness of the services sector with the rest of the economy, it is critical to understand how it affects other macroeconomic variables, most notably output growth. Our primary objective is to survey and analyse the service sector’s current state to ascertain its contribution to economic growth. This study undertakes this investigation using systematic econometric approaches and annual data from 1972 to 2021. Findings suggest that expanding the service industry in Bangladesh positively impacts the country’s per capita income (PCI) growth rate. Particularly, if the service sector growth increases by one percentage point, the growth of per capita real GDP will increase by 0.62 percentage points. The finding has important policy implications. Most importantly, government needs to enact policies to promote the service sector of the country in an effort to achieve economic prosperity.JEL Codes: L80, O11, O14
Due to the growing importance of Bangladesh’s service economy and the country’s expanding industrial sector, strengthening the service sector has become a primary objective. Given the size and interconnectedness of the services sector with the rest of the economy, it is critical to understand how it affects other macroeconomic variables, most notably output growth. Our primary objective is to survey and analyse the service sector’s current state to ascertain its contribution to economic growth. This study undertakes this investigation using systematic econometric approaches and annual data from 1972 to 2021. Findings suggest that expanding the service industry in Bangladesh positively impacts the country’s per capita income (PCI) growth rate. Particularly, if the service sector growth increases by one percentage point, the growth of per capita real GDP will increase by 0.62 percentage points. The finding has important policy implications. Most importantly, government needs to enact policies to promote the service sector of the country in an effort to achieve economic prosperity.JEL Codes: L80, O11, O14
Who Rewards Farmers Better for Commercialisation? Public versus Private Contracting Firms in North India
The Indian Economic Journal, Ahead of Print.
This article explores the socioeconomic factors of wheat growers’ participation intensity in contract farming (CF) under both public and private firms in Haryana. Using the primary survey data of 754 wheat growers collected from two districts of Haryana, the study finds that CF participation intensity is higher under government corporations than in private firms. The Tobit regression results show that similar variables determine the participation intensity under both types of firms. But the perception of agricultural profitability has different significant signs for public and private firms. This difference in profitability perception spawns from the different contracting nature of both types of firms. The government firms directly contact farmers, while private firms hire agents to communicate with farmers. In addition, government firms encourage marginal and small farmers to adopt CF, while private firms prefer medium to large farmers owning a minimum of five acres of cultivable land. Payment security is another reason for the intensity difference between types of firms. Therefore, the study calls for a policy framework to establish better institutional structure to strengthen CF inclusiveness, where both types of firms provide the scope for more extensive participation across the groups of farmers.JEL Codes: Q12, Q13, C01
This article explores the socioeconomic factors of wheat growers’ participation intensity in contract farming (CF) under both public and private firms in Haryana. Using the primary survey data of 754 wheat growers collected from two districts of Haryana, the study finds that CF participation intensity is higher under government corporations than in private firms. The Tobit regression results show that similar variables determine the participation intensity under both types of firms. But the perception of agricultural profitability has different significant signs for public and private firms. This difference in profitability perception spawns from the different contracting nature of both types of firms. The government firms directly contact farmers, while private firms hire agents to communicate with farmers. In addition, government firms encourage marginal and small farmers to adopt CF, while private firms prefer medium to large farmers owning a minimum of five acres of cultivable land. Payment security is another reason for the intensity difference between types of firms. Therefore, the study calls for a policy framework to establish better institutional structure to strengthen CF inclusiveness, where both types of firms provide the scope for more extensive participation across the groups of farmers.JEL Codes: Q12, Q13, C01