CLUB CONVERGENCE ACROSS INDIAN STATES: AN EMPIRICAL ANALYSIS

Arfat Ahmad Sofi () and S. Raja Sethu Durai
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Arfat Ahmad Sofi: Rajiv Gandhi National Institute of Youth Development, India
S. Raja Sethu Durai: Pondicherry University, India

Journal of Economic Development, 2015, vol. 40, issue 4, 107-124

Abstract: This study evaluates the Pair-wise approach (Pesaran, 2007) and Spatial Interaction Models to examine the income convergence across 22 Indian States from 1981-82 to 2010-11. Our findings identify a small number of pairs that support income convergence; however, overall there is no evidence of club convergence in Indian states. While considering these pairs as a measure of neighborliness in spatial models, there are evidences of convergence with significant spatial interaction that provides two inferences. First, a transitional behavior of Indian states towards higher steady state is evident and second, using only geographic boundary as a measure of neighborliness can underestimate the spatial interaction in a highly technologically connected world.

Keywords: Growth; Club Convergence; Pair Wise; Spatial Interaction; India (search for similar items in EconPapers)
JEL-codes: C22 O40 R11 R12 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:40:y:2015:i:4:p:107-124

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