Output convergence at sector level across Indian states: Evidence from weak sigma and club convergence analysis

Vaseem Akram and Jabir Ali

Journal of International Development, 2021, vol. 33, issue 7, 1166-1188

Abstract: The study assesses the per capita output (PCO) convergence hypothesis across 33 Indian states/Union‐Territories at the aggregate and sectoral level by using weak‐sigma and clustering‐algorithm convergence tests for the period of 2011–2012 to 2018–2019. Results from the weak‐sigma convergence test show mixed evidence. This suggests that Indian states are not converging to single steady‐state. Further, results revealed the existence of multiple club‐convergence at aggregate and sectoral level after applying the clustering‐algorithm test. Results also show that the service sector is converging faster than the industry and agriculture sectors. Our findings recommend that sector‐specific policies need to be adopted to boost the aggregate PCO at club level.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:33:y:2021:i:7:p:1166-1188

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