International Journal of Econometrics and Financial Management
ISSN (Print): 2374-2011 ISSN (Online): 2374-2038 Website: http://www.sciepub.com/journal/ijefm Editor-in-chief: Tarek Sadraoui
Open Access
Journal Browser
Go
International Journal of Econometrics and Financial Management. 2015, 3(2), 76-83
DOI: 10.12691/ijefm-3-2-4
Open AccessArticle

Dynamic Patterns of Structural Change and Economic Growth during the High Growth Regime in India: A Panel Data Analysis

M. R. Singariya1,

1Department of Economics, Government College Jaitaran (Raj), INDIA

Pub. Date: January 28, 2015

Cite this paper:
M. R. Singariya. Dynamic Patterns of Structural Change and Economic Growth during the High Growth Regime in India: A Panel Data Analysis. International Journal of Econometrics and Financial Management. 2015; 3(2):76-83. doi: 10.12691/ijefm-3-2-4

Abstract

Using panel data collected from the CSO for thirty two states and UTs of India for the recent period of 2004-05 to 2013-14 at the constant 2004-05 prices, the present paper highlights the effect of structural change on economic growth. We examine these relationships in an augmented Chenery-Syrquin Model, and test whether the high income states, EAG (Empowered Action Group) States and high densely states have had any structural impact and what type of structural trends have been adopted by the economy in such a high growth period. Results of random effect model show that any increases in the shares of manufacturing sector and industrial sectors (mining and Quarrying, manufacturing and construction) have significant positive effect on economic growth (Income Coefficient), while the patterns of industrial sector has significant positive effects on population density (Size Coefficient). However, the coefficient of population density is insignificant yet positive for manufacturing orientation. These relationships suggest that most densely populated states can achieve economies of scale, resource endowments and scale of domestic demand easily and hence population density plays an important role in the patterns of industrial and manufacturing development. The time trend seems to have significant negative association with industrial orientation and dummy for high income states has significant positive association with service sector and significant negative association with agriculture and manufacturing sectors.

Keywords:
structural change economic growth agriculture industry service India

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]  Bhatacharya, B.B. and A Mitra (1997): “Changing Composition of Employment in Tertiary Sector: A Cross Country Analysis”, Economic and Political Weekly, 21 March, Vol. 32, 529-34.
 
[2]  Blecker, R.A., 2009. External shocks, structural change and economic growth in Mexico, 1979-2007. World Development 37, 1274-1284.
 
[3]  Chenery, Hollis B., “Patterns of Industrial Growth,” American Economic Review, Vol. 50, No. 3 (September 1960), pp. 624-54.
 
[4]  Chenery, Hollis B. and Lance Taylor, “Development Patterns: Among Countries and Over Time,” Review of Economics and Statistics, Vol. 50, No. 4 (November 1968), pp. 391-416.
 
[5]  Chenery, Hollis B. and Moises Syrquin, Patterns of Development: 1950-1970 (New York: Oxford University Press for the World Bank, 1975).
 
[6]  Elhiraika, A. B. (2008). Promoting manufacturing to accelerate economic growth reduce volatility in Africa. Paper prepared at the African Economic Conference, jointly organized by the African Development Bank and UNECA in Tunis, Tunisia.
 
[7]  Kalirajan, K. (2004). “Economic reforms and the transmission of growth impulses across Indian states”, International Journal of Social Economics, 31 (5/6), 623-636.
 
[8]  Keesing, D.B. and Sherk, D.R> (1971), “Population Density in Patterns of Trade and Development”, American Economic Association, 61(5):956-961.
 
[9]  Kuznets, S. (1966), Modern Economic Growth: Rate, Structure and Spread, New Delhi, Oxford and IBH Publishing Co.
 
[10]  Libanio, G. (2006). Manufacturing industry and economic growth in Latin America: A Kaldorian approach. CEDEPLAR, Brazil: Federal University of Minas Gerais.
 
[11]  Linden, M. and T. Mahmood, (2007), Long run relationships between sector shares and economic growth: A panel data analysis of the schengen region. Economics and Business administration University of Joensuu, Finland Nachane, D.M., S.D. Sawant& C.V. Achuthan, (1989), Agriculture and industry: A study of selected linkages. Indian J. Agric. Econ., 44: 140-149.
 
[12]  Syrquin, Moshe and Hollis B. Chenery, “Patterns of Development, 1950 to 1983,” World Bank Discussion Papers, No. 41 (Washington, D.C.: World Bank, 1989)
 
[13]  Syrquin, Moshe, Lance Taylor, and Larry E. Westphal (eds.), Economic Structure and Performance: Essays in Honor of Hollis B. Chenery (Orlando: Academic Press, 1984).
 
[14]  Wang, S., & Li, D. (2010) “A empirical analysis on the relationship between service industry and economic growth”, Proceedings of 2010 International Conference on Industry Engineering and Management.