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Regional Openness, Income Growth And Disparity Across Major Indian States During 1980-2004

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  • Dibyendu Maiti

    (IEG)

  • Sugata Marjit

Abstract

As a country progressively engages in international trade, its factors of production will enter increasingly into the export sector, where their return is higher, compared to the import competing sector. At the regional level too those states, which can attune their production structure to international demands, earn higher than other states and grow at a faster rate. Further if the newly-industrial states concentrate more on those sectors, a trend of regional convergence will be discernible. Then, the regional openness index, developed by Marjit, Kar and Maiti (2007), has been reconstructed by using two alternative weighting techniques to combine the export and import intensities, ranks of correlation of state production shares, respectively with national export and import shares of the states. The per capita net state domestic products have grown in all major states in India during 1980-2004 but at different rates resulting to the rise of regional disparity and the regional openness have been detrimental for this. The state, which moved away from importable production to exportable production, grew faster than the rate of others at least by 1-1.5% per annum. Definitely, a few newly-industrial states showed an increasing dependence on exportable production, but not all. Moreover, some of the industrially developed states (in terms of exportable share) it has been observed yet continue with importable production to a large extent.

Suggested Citation

  • Dibyendu Maiti & Sugata Marjit, 2009. "Regional Openness, Income Growth And Disparity Across Major Indian States During 1980-2004," Development Economics Working Papers 22927, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:develo:22927
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    2. Aradhna Aggarwal & Nagesh Kumar, 2012. "Structural Change, Industrialization and Poverty Reduction: The Case of India," Development Papers 1206, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office.
    3. Naresh Kumar & Ritu Rani, 2019. "Regional Disparities in Social Development: Evidence from States and Union Territories of India," South Asian Survey, , vol. 26(1), pages 1-27, March.

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    More about this item

    Keywords

    Regional Openness Index; trade; Growth; Disparity; Indian States;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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