Showing papers by "Indira Gandhi Institute of Development Research published in 2017"

Household food insecurity and children's dietary diversity and nutrition in India. Evidence from the comprehensive nutrition survey in Maharashtra.

Abstract: We analyse data from the 2012 Comprehensive Nutrition Survey in the State of Maharashtra, India, which surveyed 2,630 households. This is a unique dataset because in addition to nutritional status of mothers and children, it has information on diets of women and children and household food security. This rich dataset allows us to address three issues: whether household food security predicts higher diet diversity in children aged 6-23 months; whether household food security predicts lower risk of undernutrition; and whether the lower risk of undernutrition in children who live in food secure households is mediated by improved diet diversity for children. We find that children from moderately food insecure and severely food insecure households are more likely to have lower diet diversity scores. We find that the odds of a child being severely stunted, severely underweight, or severely wasted are higher in severely food insecure households. After controlling for children's diet diversity, and other child, maternal and household characteristics, we find that household food security is no longer statistically associated with stunting, wasting, or underweight. However, diet diversity of children is statistically significantly associated with whether a child is stunted or underweight. Our results although not causal provide evidence for understanding the extent to which household food insecurity affects children's diet diversity and how both these factors affect nutrition outcomes in children. Our analysis informs Government of Maharashtra's and India's National Nutrition Mission in their efforts for formulating appropriate policies and programmes to address child undernutrition.

Corporate governance challenges in emerging economies

Abstract: Corporate governance research in the context of emerging economies has received increasing attention in recent years. Corporate scandals and executive failures continue despite the growing emphasis on governance reforms around the world and the increasing activism of shareholders, governments and other corporate stakeholders. Academics and practitioners are becoming aware that firm-level governance mechanisms at work in different countries are embedded in national business systems and are influenced by political, social and legal macro-institutions. To promote the studies on governance challenges in emerging markets, we organized a special issue conference in conjunction with Corporate Governance: An International Review (CGIR) in Edinburgh, UK on December 4-5, 2015 on the theme of “Challenges in Corporate Governance in Emerging Economies”. In this article, we introduce peculiarities of corporate governance in emerging economies, survey the papers included in the special issue and explore future research directions.

Why Tax Effort Falls Short of Tax Capacity in Indian States: A Stochastic Frontier Approach

Abstract: This article attempts to measure tax capacity and tax effort of fourteen major Indian states from 1991–1992 to 2010–2011 using stochastic frontier analysis. It shows that the variation across states in tax effort is wide and increasing over time. While per capita gross state domestic product, literacy rate, and labor force participation have positive association with tax capacity, a greater share of agriculture has negative association. Furthermore, intergovernmental transfers, given tax capacity, have negative association with tax effort of states. Expenditure on debt repayment is also adversely associated with tax effort but to a lower extent than outstanding liabilities. Enactment of Fiscal Responsibility and Budget Management Act is associated with improvement in states’ tax effort. Both within-state political competition and governance indicators have positive association on tax effort.

Eco-industrial networking for sustainable development: review of issues and development strategies

Abstract: Energy and Resources use efficiency in industrial sector holds the key in achieving sustainable development. Networking among industries to use by-product and waste product streams as input sources to the other industrial units, which is termed as Eco-industrial Networking holds the key for Eco-industrial development which is a building block of sustainable development of cities. Based on the Korean eco-industrial park (EIP) experience, the present paper reviews the key drivers to such a networking, identifies what are the conditions and strategies required at different levels, and barriers for their implementation. The paper further contextualizes the same to Asian region by linking EIPs to urban systems and that evolves into Eco-city concepts. Ability of such eco-efficiency imbibing network towards decarbonizing the development paths is also discussed.

Spatial Convergence and Growth in Indian Agriculture: 1967–2010

Abstract: Inter-state disparity has been a perennial feature of Indian agriculture. The study probes if per capita income from agriculture has converged across states and finds evidence in favour of beta convergence. Spatial econometric techniques used indicate significant spatial dependence in agricultural growth. Infrastructure like roads, irrigation, and electricity, diversification in cropping pattern and quality of human capital are found to aid in growth. However, excessive rainfall tends to decrease growth rate in India. The spill-over across states are found to be primarily driven by roads, irrigation and rural literacy and we also find significant impact of spatial income growth providing evidence in favour of agglomeration effects. Hence, investments in human capital, physical infrastructure specially water management and incentives towards growing crops which yield higher returns will aid agriculture growth in India.

2016 KIEP Visiting Fellows Program

Abstract: In 2009, Korea Institute for International Economic Policy (KIEP) launched "Visiting Fellows Program (VFP)" with the view of advancing cross-border exchanges of knowledge, information, insights and expertise Since its inception, the VFP has demonstrated that sharing thoughts and ideas through face-to-face contacts and dialogue works as a catalyst for enhancing mutual understanding among scholars and professionals with diverse background By successfully implementing the VFP for the past 8 years, KIEP has been motivated to assume the role as a hub for international economic research in the region As a host of the program, KIEP has many mandates One of those tasks is to let more people know what has been accomplished through the program and how valuable it is In an effort to do so, KIEP has published series of research every year This volume, the 8th of its series, contains eight research papers contributed by 2016 Visiting Fellows Publication owes many debts Here I acknowledge just a few of them First of all, I must express my deepest gratitude to the 2016 visiting fellows for their outstanding performances My special thanks also goes to the Outreach Team and the staffs of the KIEP Publishing Team who worked very hard for the publication of this volume The views expressed in this publication are the views of the author and do not necessarily reflect the views or policies of KIEP KIEP does not guarantee the accuracy of the data included in the publication

Money's Causal Role in Exchange Rate: Do Divisia Monetary Aggregates Explain More?

Abstract: The paper investigate the predictive power of Divisia monetary aggregates in explaining exchange rate variations for India, Israel, Poland, UK and the US, in the years leading up to and following the 2007-08 recessions. One valid concern for the chosen sample period is that the interest rate has been stuck at or near the zero lower bound (ZLB) for some major economies. Consequently, the interest rates have become uninformative about the monetary policy stance. An important innovation in our research is to adopt the Divisia monetary aggregate as an alternative to the policy indicator variable. The paper applies bootstrap Granger causality method which is robust to the presence of non-stationarity in our data. Additionally, it uses bootstrap rolling window estimates to account for the problems of parameter non-constancy and structural breaks in our sample covering the Great recession. The paper finds strong causality from Divisia money to exchange rates. By capturing the time-varying link of Divisia money to exchange rate, the importance of Divisia is further established at ZLB.

Urbanisation in a Decade of Near Jobless Growth

Abstract: Unlike other countries at similar levels of development, the transition of the workforce out of agriculture in India is incomplete. While we have a fair understanding of developments at the national and state levels, due to data limitations, very little is known about the processes at play and the consequent labour market outcomes across the size class of villages and towns of India. In this chapter, we outline the stages in the rural non-farm employment transition since this has implications for the rate of urbanisation and the changes in key workforce indicators at the national level in the inter-censal period 2001–11. We, then, provide estimates of a few key indicators of the labour market across size class of cities. Finally we expose the level of job concentration across 21 broad sections of industry at the sub-national level. From the analysis it emerges that initiatives aimed at the expansion of non-farm employment need to begin with an improved understanding of the conduciveness of the urban employment pattern in the nearby areas. However, given the dispersed nature of census towns, an alternative view would be that small towns and villages, irrespective of whether they are in the vicinity of an urban agglomeration or not, could be engines of growth.

'Arranged' Marriage, Education, and Dowry: A Contract-Theoretic Perspective

Abstract: (ProQuest: ... denotes formulae omitted.)1.INTRODUCTION: BACKGROUNDDowry is characterised by asymmetry, uncertainty and unpredictability (Srinivas, 1989).This paper provides a framework to explore interconnections among "arranged" marriage, education, and dowry essentially in an incomplete information setting. The hypothesis is that when the quality of the groom is not directly observable, then education level of the groom as well as dowry transacted at the time of marriage, help to screen grooms of different qualities. In equilibrium, different types of grooms select different education-dowry contracts, with higher/better types being associated with both higher education and higher dowry. Hence by imparting to education an Arrow-Spence-Stiglitz (Arrow, 1973; Spence, 1973; Stiglitz, 1975) kind of screening role, we are able to explain the perverse (positive) relation between education and dowry (which the human capital approach to education, for example, could not, see discussion below). This also has serious policy implications since greater public expenditure on education may then actually exacerbate dowry inflation instead of mitigating the problem, as expected according to the human capital approach. Before we explain the mechanism of the model, we first briefly describe the concepts of 'arranged' marriage, education and dowry, especially in the context of our model.There are broadly two main types of marriage arrangements - "love" marriages that dominate Western nations such as the United States and those in Europe and "arranged" marriages which are dominant in many parts of Asia and Africa (see Penn, 2011 for example). In the former, partners are chosen by each other and relationships are sustained with notions of romantic love culminating in marriage. An arranged marriage on the other hand, is one where parents (rather than prospective spouses themselves) choose marital partners. Arranged marriages so defined remain typical for large parts of the world like India, Pakistan, and Bangladesh (see Myers et al., 2005).By the very nature of the procedure, information transmitted between the marital parties about each other is necessarily limited in an arranged marriage setting, relative to love matches where the potential spouses get to mix freely with each other.1 Narayan (1993) aptly speaks of arranged marriages as follows:2More and more, parents entrust the lives and safety of their daughters to families they know very little about; they can gain no information or assurance from common acquaintances, and they will not be close by to look out for their daughters ' welfare. Parents experience the marriage of their daughter as "losing " her to another family....In the Western world, usually men and women can mix freely and date each other before selecting their partners (for instance, see Penn, 2011 for an account in Western Europe). In fact, they can even live together before marrying their partners. Hence information regarding each other is likely to be much more accurate than in many societies where such free mixing is eschewed.3 In contrast to such liberal practices as in the West, stringent social norms in many other parts of the world, allow only 'arranged' marriages where families of the potential bride and the groom meet each other and the marriage.4 Naturally the amount of information that can be gathered about the potential bride/groom is substantially small compared to when couples can meet each other.5Moreover, social pressure is such that marriages are hard to break (see Pothen, 1989 for example). Hence once married the couple is expected to stay together irrespective of how the match turns out to be.6 Hence a spouse, once chosen, remains a life-long partner.7 With virilocality, this means the bride/bridal family makes a decision with quite limited information that is going to affect her for the rest of her life (it affects the groom as well but since the bride goes to live with her in-laws she is likely to be more concerned with the decision). …

A DSGE model-based analysis of the Indian slowdown

Abstract: In this paper we take a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to the Indian data using Kalman filter based maximum likelihood estimation. Our model based output gap tracks the statistical Hodrick-Prescott filter based output gap well. Comparison of estimated parameters, impulse responses and forecast error variance decomposition between India and United States points to differences in the structure of the two economies and of their inflationary process. Our estimates suggest higher value of habit persistence, more volatile markup and interest rate shocks in India. Markup shocks play a much larger role in determination of Indian inflation, pointing to the importance of supply side factors. Impulse responses show a higher impact of interest rate shocks on output and inflation, and lower impact of technology shocks on output in comparison to US. The latter again suggests the presence of supply side bottlenecks. We use smoothed states obtained from the Kalman filter to create counterfactual paths of output and Inflation (during 2009 Q4 to 2013 Q2) in presence of a given shock. In the post 2011 slowdown, monetary shock imposed significant output cost and for a brief period of time made the output gap negative.

Conditions for inclusive innovation with application to telecom and mobile banking

Abstract: An innovation is defined to be inclusive if it is affordable and increases productivity. Three ways of facilitating inclusion through such innovation in emerging and developing economies are derived analytically. First, invest in inducing more technical change in products the less well-off use. Second, improve capital or skills available to them. Third, reduce their transaction costs. Both the second and the third increase market size for inclusive innovation, thus promoting it through markets. An example of the second is better public provision of relevant infrastructure and of the third is better regulatory design. Absence of such a focus in Indian telecom and mobile banking policy limited market size. Poor Internet infrastructure constrained development of mobile services. Higher transaction costs explain India’s slow start in mobile banking, compared to Pakistan.

Internationalization of Indian Enterprises: Patterns, Determinants, and Policy Issues

Abstract: This paper examines the emerging patterns and economic implications of Indian overseas direct investment (ODI) from a historical perspective. The novelty of the analysis lies in its specifi...

Group Differential for Attainment and Failure Indicators

Abstract: The study revisits the properties of group differential (GD) measures and extends it to include monotonicity and policy sensitivity axioms. Imposing level sensitivity, which indicates that a given gap is worse off at higher (lower) level of attainment (failure), the study concurs that ‘simple difference’ and ‘simple ratio’ are the most basic GD measures for attainment and failure indicators, respectively. It proposes two new measures, one each for attainment and failure, which have certain advantages from a policy implication perspective. An empirical illustration has been provided by taking two indicators from Millennium Development Goals for different regions of the world. Copyright © 2013 John Wiley & Sons, Ltd.

Dynamic stochastic general equilibrium (DSGE) modelling in practice: identification, estimation and evaluation

Abstract: In recent years, dynamic stochastic general equilibrium (DSGE) models have come to play an increasing role in central banks, as an aid in the formulation of monetary policy (and increasingly after the global crisis, for maintaining financial stability). DSGE models, compared to other widely prevalent econometric models (such as vector autoregressive or large-scale econometric models), are less a-theoretic and with secure micro-foundations based on the optimizing behaviour of rational economic agents. Additionally, the models in spite of being strongly tied to theory, can be ‘taken to the data’ in a meaningful way. A major feature of these models is that their theoretical underpinnings lie in what has now come to be called as the New Consensus Macroeconomics (NCM). This paper concentrates on the econometric structure underpinning such models. Identification, estimation and evaluation issues are discussed at length with a special emphasis on the role of Bayesian maximum likelihood methods.

Scientometric study of Indian cancer research based on Scopus database

Abstract: This study explores to identify prominent institutes contributing to cancer research in India, major publication channels used and impact of highly cited papers on social media. Scopus citation dat...

Seasonal Migration and Feminization of Farm Management: Evidence from India

Abstract: This paper explores the association between short-term migration in the household and feminization of farm management in rural India. The analysis uses a nationally representative data set covering 35,604 rural Indian households in the year 2013. There is gender disaggregated information on who operates land in addition to the presence of a short-term migrant in the household. We model the labor outcomes of women as reflected by their participation as major decision-makers (main operator) or minor decision makers (associated operator) on the household operational holding. Overall, we find that women are less likely than men to be either main or an associated operator. However, in households with a short-term migrant, the probability of a woman being a decision maker as an operator increases. These results are robust to endogeneity and sample selection concerns. Our study highlights the importance of unpacking the feminization process to better understand the role of women as farm managers.

Poverty and Employment: Roles of Agriculture and Non-agriculture

Abstract: This paper examines issues and policies in the roles of agriculture and non-agriculture in raising employment and reduction in poverty. First, it provides poverty trends in the pre and post-reform periods. Second, it analyses factors for decline in poverty and different views on the roles of agriculture and non-agriculture in reducing poverty. Third, it looks at the agricultural policies including doubling of farm income. Fourth, it examines briefly issues in rural non-farm sector, manufacturing and services, social protection programmes and inequality. Apart from agriculture, focus is needed on two areas for reduction in poverty: raising quality employment and education. Manufacturing and services are important sectors for absorption of labour. India has to forge its own path of manufacturing development. Reduction in inequalities is important for its own sake but also for poverty reduction. Finally, improvement in gender is equality crucial for raising GDP and poverty reduction significantly.

The Changing Nature of Rurality: Reframing the Discourse on Migration and Commuting

Abstract: The focus of this chapter is on rural employment diversification and rural-urban commuting. An estimated 13% of rural workers enaged in nonagricultural activites and an equal proportion of urban workers commute for work in India. The majority of commuting of rural workers is for work in urban areas, whereas urban workers commute to both rural and other urban areas for work. The incidence of commuting from rural areas for work is high among non-farm casual as well as self-employment. The comparison of welfare implications of short-term rural-to-urban migration and rural-to-urban commuting shows that the consumption standards of the latter are much better than those of the former. Given the basis of growing evidence of mobility for work between rural and urban areas and the better welfare implications of commuting, the authors suggest increased investment in affordable mass transport connecting rural and urban areas.

A nonlinear optimal control approach to stabilization of a macroeconomic development model

Abstract: A nonlinear optimal (H-infinity) control approach is proposed for the problem ofstabilization of the dynamics of a macroeconomic development model that is known as the Grossman-Helpman model of endogenous product cycles. The dynamics of the macroeconomic developmentmodel is divided in two parts. The first one describes economic activities in a developed country andthe second part describes variation of economic activities in a country under development which tries tomodify its production so as to serve the needs of the developed country. The article shows that throughcontrol of the macroeconomic model of the developed country, one can finally control the dynamicsof the economy in the country under development. The control method through which this is achievedis the nonlinear H-infinity control. The macroeconomic model for the country under developmentundergoes approximate linearization round a temporary operating point. This is defined at each timeinstant by the present value of the system’s state vector and the last value of the control input vectorthat was exerted on it. The linearization is based on Taylor series expansion and the computation of theassociated Jacobian matrices. For the linearized model an H-infinity feedback controller is computed.The controller’s gain is calculated by solving an algebraic Riccati equation at each iteration of thecontrol method. The asymptotic stability of the control approach is proven through Lyapunov analysis.This assures that the state variables of the macroeconomic model of the country under developmentwill finally converge to the designated reference values.

Intervention and signaling: interaction between central banks and fx markets in an emerging market

Abstract: The paper analyzes the effectiveness of intervention and of signals on future intervention on the foreign exchange market of an emerging market (EM) facing large capital flows. A model of strategic interaction between speculators and the Central Bank shows the speculative demand curve to be downward sloping under greater uncertainty about fundamentals, which is common in EMs. Tests with Indian data confirm a stable speculative demand curve. The domestic currency appreciates when net dealer demand is positive. Intervention influences exchange rate levels and volatility. Anticipated intervention decreases dealer turnover, so expectations are stabilizing and signals on future intervention effective.

Indian LIS Job Market and its Visibility through Portals and Mailing Lists/Forums

Abstract: The main aim of the study was to explore how marketing of LIS jobs is done through Mailing list/Portal. Content analysis method was applied considering job advertisements for Library and Information professionals that appeared from January 2014 to December 2014 in mailing lists & Portal. The analysis of jobs were done by considering pointers such as number, month-wise, state-wise, nature of appointment, job description etc. It was observed that maximum number of job ads were posted during first half of the year, January receiving high number of job ads. The maximum number of ads posted was of General category. It was observed that more than half of job ads posted were of temporary/contractual nature. It was noted that almost 3/4 job ads were posted for Academic Libraries. It was found that half of the job ads came with full job description whereas half mentioned a link to the original ad appearing in respective universities website/newspaper.

Will a matchmaker invite her potential rival in

Abstract: This paper analyzes optimal strategies of an incumbent intermediary, who matches agents on the two sides of a market, in the presence of entry threat under alternative scenarios. It shows that, when entry is free, strategic entry accommodation is the optimal choice of the incumbent—not entry deterrence, unless the variation in agents' types is small. Entry accommodation remains optimal for the incumbent for a wide range of parametric configurations even when there is a fixed cost of entry. These results are in sharp contrast to the predictions of existing models of entry.

The Effect of Political Regime and Freedom on Economic Growth

Abstract: Do political regime and freedom have a significant effect on economic growth? This paper tries to maintain differences in three political regimes viz. autocracies, bureaucracies and democracies and examines whether these regimes have different features overall and within specific continents in terms of effecting economic growth. Besides this paper study the effect of freedom status of a country (which is well associated with the political regime) on economic growth so as to accomplish a comparison of the results. The study covers 57 countries over 11 years, 1990-2000. The results suggest that the political regime and freedom have highly significant effect on economic growth with unique results for each continent.

Investment, Uncertainty and Credit Market Imperfection in India

Abstract: The paper attempts to make a timely contribution to the debate on the status of business fixed investments in Indian private manufacturing firms. There are two key issues on which the debate hinges: lower presence of formal credit and, procedural and contractual rigidities. Lower presence of formal credit restricts or makes it costlier for a group of firms to incur investment expenditure that they would have incurred otherwise. Such firms predominantly rely on their internal funds for investment. Procedural and contractual rigidities, on the other hand, make almost all the investment projects undertaken, partially or completely, irreversible. Firms respond to such irreversibilities by aligning their investment to a relatively favorable time which, in turn, depends on the way firms process future uncertainty. The analytical exercise endogenously distinguishes between two investment regimes based on the access to external credit and uses a set of characteristics, along with different measures of uncertainty, to explain fluctuations in investment. The results provide three important observations. First, in the post-reform period there has been an adverse shift in the investment financing policy. Second, firms with inferior access to external credit are smaller, younger, pay less dividend, export less and belong to an industry with inferior demand than others. Such firms invest by running down their available cash flows and selling assets. Third, macroeconomic uncertainty depresses investment whereas microeconomic uncertainty has no impact on investment.

Effect of Demonetization on Analysts’ Estimates: A Natural Experiment

Abstract: This paper examines the effect of macroeconomic shock on analysts’ estimates of quarterly earnings per share (EPS). In particular, we investigate the effect of demonetization announcement on Indian corporate sector in terms of analysts’ estimates of EPS. The study is set as a natural experiment because demonetization announcement is treated as an external shock to the economy and we examine its effect on analysts’ estimates of EPS for December 2016 quarter (pre announcement) and analysts’ estimates of EPS for December 2016 (post announcement). We also test the long term effect of demonetization on the Indian corporate sector by investigating changes in analysts’ estimates of EPS for March 2017 quarter. We find that demonetization adversely affects the analysts’ estimates for December 2016 quarter; however, there is no long term negative impact on analysts’ estimates of EPS.

Penny Stocks in India

Abstract: This study explored the characteristics of Indian stocks when categorized on the basis of nominal prices. Special focus is on the Penny Stocks which are the least price category. We find that penny stocks in India are categorized by higher raw returns, very low share of market capitalization and turnover and bad corporate governance. However, when adjusted for extreme returns, penny stocks generate less return compared to high denomination stocks. Penny stock returns are well explained by the standard empirical asset pricing models. However, when adjusted for corporate governance, they exhibit extra abnormal returns. The higher denomination priced stocks in India outperform the market across all the models.