Developing a Framework of Regional Competitiveness Using Macro and Microeconomic Factors and Evaluating Sources of Change in Regional Competitiveness in India Using Malmquist Productivity Index

Nirmalkumar Singh Moirangthem () and Barnali Nag ()
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Nirmalkumar Singh Moirangthem: Indian Institute of Technology Kharagpur
Barnali Nag: Indian Institute of Technology Kharagpur

International Journal of Global Business and Competitiveness, 2020, vol. 15, issue 2, No 1, 79 pages

Abstract: Abstract Many studies on measurement of regional competitiveness focus on outcome-based pyramidal and hat models of Lengyel (2004) and Martin (2003) respectively using revealed indicators like per capita income, labour productivity and employment rate. On the other hand, Porter’s (1990) diamond model focuses on foundational microeconomic factors of competitiveness. This study comprises of two objectives; first, to develop a new framework of extended Diamond based Pyramid of regional competitiveness by integrating the two, and second, to assess sources of change in regional competitiveness for 32 states/union territories of India. For this, Malmquist productivity index (MPI) framework has been used, treating per capita net state domestic product as output and six factors of regional competitiveness developed from first part of the study as inputs. Results show that regional competitiveness is almost singularly driven by the frontier shift component of MPI, while there is negligible contribution of efficiency change. This is interpreted as states benefitting more from better collective knowhow and resources of competitiveness provided by the economic environment in general. However, the states are not able to correct the individual inefficiencies compared to their most efficient peers.

Keywords: Regional competitiveness; Porter diamond model; Malmquist productivity index; Factors of competitiveness; State domestic product; India (search for similar items in EconPapers)
JEL-codes: O41 O43 O47 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s42943-020-00016-2

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