Showing papers by "Indira Gandhi Institute of Development Research published in 2019"

Drivers of greenhouse gas emissions in the United States: revisiting STIRPAT model

Abstract: The challenge of reducing emissions of greenhouse gases (GHG) has stimulated great attention among policymakers and scholars in recent past, and a number of STIRPAT (Stochastic Impacts by Regression on Population, Affluence, and Technology) studies on carbon emissions have been conducted. This paper contributes to that literature by: (i) studying per capita GHG emissions in the United States (US) adopting STIRPAT modeling framework; (ii) employing new explanatory factors like cattle population density, political willingness to address environmental problems, and educational attainment; and (iii) investigating whether emissions elasticities of various factors vary within the US or not. State-level panel data over the period 1990–2014 are used, and partitioning of the sample is done with respect to two controlling factors: an indicator of political support to environmentalism and educational attainment. Results of heterogeneous slope parameters panel data models indicate that cattle density and affluence are major drivers of per capita GHG emissions in the continental US. We find strong evidence of heterogeneity in emissions elasticities across partitioned samples. Our grouping analysis suggests that in a diverse country like US, policymakers should not focus on the average relationships dictated by a single STIRPAT equation, but should account for regional differences if they want accuracy and higher effectiveness in climate policymaking.

Is there a trade-off between social and financial performance of public commercial banks in India? A multi-activity DEA model with shared inputs and undesirable outputs

Abstract: Indian public commercial banks play a crucial role in the financial support for the economic development, poverty alleviation, and women's empowerment. As social banks, they have dual performance objectives of financing the vulnerable sections of society as well as providing mainstream financial services. Balancing these twin missions is the biggest challenge for these hybrid enterprises. To date, no study has been published giving evidence on whether these banks are efficient in both facets of their dual goals. For this reason, this paper adds to the literature by measuring the social and financial efficiency of a sample of 26 Indian public banks over 2011–2014 by using an innovative Multi-activity Data Envelopment Analysis (MDEA) model with shared inputs and undesirable outputs. Our study also examines whether there is a conflict or trade-off between socially responsible and for-profit banking practices. We find that Indian public banks have managed their dual mission relatively well, but on average, they have been much more efficient in social (99.4%) than conventional banking (81.9%) activity. Moreover, this study shows a significant synergy effect between social and financial performance. However, when regional differences across India are considered by comparing the social and financial efficiency scores for different degrees of economic and human development in Indian states, the significant synergy effect is only confirmed in those public banks located in less more economically developed Indian states.

Land Distribution, Income Generation and Inequality in India's Agricultural Sector

Abstract: This paper is a contribution to understanding income generation and inequality in India's agricultural sector. We analyze the National Sample Surveys of agriculture in 2003 and 2013 using descriptive and regression based methods, and estimate income inequality in the agricultural sector at the scale of the nation and its 17 largest states. We show that: (a) there are significant state‐level differences in the structures/patterns of income generation from agriculture, (b) there is a negative relationship between the amount of land owned by the household and share of wages in total income, (c) income inequality in India's agricultural sector is very high (Gini Coefficient of around 0.6 during the period), and (d) about half of the income inequality is explained by the household‐level variance in income from cultivation, which in turn is primarily dependent on variance in landownership.

Migration, caste and livelihood: evidence from Indian city-slums

Abstract: This paper based on a primary survey of slum dwellers in four Indian cities examines the caste dimension of migrants and the nexus, if any, between caste and the job market participation. Based on ...

When stock futures dominate price discovery

Abstract: This paper revisits the role of leverage in price discovery, using one of the most liquid single‐stock futures (SSFs) markets in the world. Price discovery is analysed as a dynamic intraday process. We find that the information share of the SSFs is 55% during news arrivals. It increases to 61%, when the news is negative and the futures is preferred because of short‐sales restrictions on the spot. A partial equilibrium analysis predicts that the trade‐off between leverage and market liquidity determines price discovery across securities. These predictions are validated by empirical evidence.

A multilevel analysis of drought risk in Indian agriculture: implications for managing risk at different geographical levels

Abstract: Drought is an important downside risk in Indian agriculture; and the spatial differences in its intensity and probability of occurrence are considerable. To develop strategies to manage the risk of drought, and to coordinate and implement these strategies, it is essential to understand the variation in drought risk across geographical or administrative levels. This paper, using a multilevel modeling approach, decomposes the variation in drought risk across states, regions, districts, villages and households, and finds it disproportionately distributed. About half the variation is attributed to between-individual (i.e., household) differences and the rest to between-population differences, mainly to states and villages. These findings suggest the potential for a critical role of states (policies) and local institutions (communities) in enhancing resilience of agriculture to droughts through the correct targeting of policies and support for the most appropriate geographic level.

From import substitution to integration into global production networks: The case of the Indian automobile industry

Abstract: This paper examines the growth trajectory and the current state of the Indian automobile industry, paying attention to factors that underpinned its transition from import substitution to integratio...

A Nonlinear Optimal Control Approach to Stabilization of Business Cycles of Finance Agents

Abstract: The article proposes a new nonlinear optimal control method for the stabilization of the business cycles of interconnected finance agents. First, the dynamics of the interacting finance agents and of the associated business cycles is described by a model of coupled nonlinear oscillators. Next, this dynamic model undergoes approximate linearization round a temporary operating point which is defined by the present value of the system’s state vector and the last value of the control inputs vector that was exerted on it. The linearization procedure is based on Taylor series expansion of the dynamic model and on the computation of Jacobian matrices. Next, for the linearized model of the interacting finance agents, an H-infinity feedback controller is designed. The computation of the feedback control gain requires the solution of an algebraic Riccati equation at each iteration of the control algorithm. Through Lyapunov stability analysis it is proven that the control scheme is globally asymptotically stable.

A Nonlinear Optimal Control Approach for Industrial Production Under an Oligopoly Model

Abstract: A nonlinear optimal ( H -infinity) control method is proposed for industrial production under an oligopoly model. First, the dynamics of the oligopoly undergoes approximate linearization around a temporary operating point (equilibrium), which is recomputed at each time step of the control method. The equilibrium comprises the present value of the production system's state vector and the last value of the control inputs vector that was exerted on it. The linearization procedure makes use of the first-order Taylor series expansion and of the computation of the Jacobian matrices of the state-space description of the system. For the approximately linearized model of the system, an H -infinity (optimal) feedback controller is designed. For the computation of the controller's feedback gain, an algebraic Riccati equation is solved at each time step of the control method. The global asymptotic stability properties of the control scheme are analyzed with the use of the Lyapunov method.

Testing the Friedman–Schwartz hypothesis using time-varying correlation analysis

Abstract: This study analyses the time-varying correlation of money and output using the DCC GARCH model for the Euro, India, Poland, the UK and the US. Apart from simple sum money, this model uses Divisia m...

An empirical analysis of disinvestment policy in India: does ideology matter?

Abstract: Using panel data estimation for limited dependent variables and sample selection models, we identify political, industry specific, firm specific and macroeconomic variables which influenced the dec...

Loan Waivers and Bank Credit: Reflections on the Evidence and the Way Forward:

Abstract: Executive SummaryIn the past decade, farm loan waivers have become a policy instrument to alleviate the financial distress of farmers. Despite agreement on the theoretical rationale for such debt f...

Nash Equilibrium in Tax and Public Investment Competition

Abstract: We analyze Nash equilibrium in fiscal competition with tax and public investment between symmetric regions. We show that given the opposite strategic nature of tax (strategic complement) and public investment (strategic substitute), there is possibility of multiple equilibria. We find that if strategic substitute effect dominates strategic complement effect, then both regions have first mover advantage in a timing game and simultaneous move Nash equilibrium (early, early) emerges; otherwise sequential move equilibria-(early, late) and (late, early) emerges. Also, sequential move Nash equilibria are Pareto improving than simultaneous move outcome. Lastly, race-to-the-bottom in taxes is restricted in sequential move equilibria.

Pulses in eastern India: production barriers and consumption coping strategies

Abstract: Increasing the production of pulses (grain legumes) and ensuring their affordability for consumers have been major concerns of policymakers in India in recent decades. Accordingly, we sought to understand the constraints to farmer expansion of pulse production and the consumption coping strategies of rural households in response to increased prices of pulses. This paper presents a study of the responses of rural households, conducted through focus group discussions, in the states of Bihar and Odisha in eastern India. Responses were analysed by a qualitative clustering method. We found that the availability of certified quality seeds and efficient and effective extension services are needed to encourage farmers to increase pulse production. Additionally, the gap between farm harvest price and the market price needs to be reduced by increasing the support price, assured procurement, and efficient local markets. With respect to people’s behaviour following an increase in the price of pulses, households belonging to historically disadvantaged groups and the landless were the most vulnerable and they resorted to the most severe consumption coping strategies. Landowners generally substituted pulses with foods of higher or equal nutritive value, whereas the landless substituted with food of lower nutritive value. These findings show an urgent need to include pulses in the public distribution system and to create new avenues for non farm income to shield consumption of pulses against increases in their prices in India.

Preferences over Public Good, Political Delegation, and Leadership in Tax Competition:

Abstract: Leadership (sequential choice) and political delegation are two mechanisms suggested to restrict “race-to-the-bottom” in tax competition. In this article, we analyze whether these two mechanisms wh...

Estimating the Relationship Between the Current Account, the Capital Account and Investment for India

Abstract: Causality from the capital account (KA) to the current account (CA) of the balance of payments indicates disruption from capital flows while the reverse can indicate smooth financing of the CA that...

Analysing Monetary Policy Statements of the Reserve Bank of India

Abstract: In this paper we quantitatively analyse monetary policy statements of the Reserve Bank of India (RBI) from 1998 to 2017, across the regimes of five governors. We first ask whether the content and focus of the statements have changed with the adoption of inflation-targeting as a framework for conducting monetary policy. Next, we study the influence of various aspects of monetary policy communication on financial markets. Using natural language processing tools, we construct measures of linguistic and structural complexity that capture governor-specific trends in communication. We find that while RBI’s monetary policy communication is linguistically complex on average, the length of monetary policy statements has gone down and readability has improved significantly in the recent years. We also find that there has been a persistent semantic shift in RBI’s monetary policy communication since the adoption of inflation-targeting. Finally, using a simple regression model we find that lengthier and less readable statements are linked to both higher trading volumes and higher returns volatility in the equity markets, though the effects are not persistent.

Does autonomy matter in state owned enterprises? Evidence from performance contracts in India

Abstract: The empirical effect of enterprise autonomy on the performance of state-owned enterprises is surprisingly scant despite autonomy being a preferred reform instrument in many countries, and often chosen over privatization. Using longitudinal data on performance contracts for state-owned enterprises in India, this paper empirically examines whether granting increased autonomy to state-owned enterprises through such contracts positively impacts enterprise profitability. Further, using the unique reform experience of India as a natural experiment, whereby enterprise autonomy has been simultaneously pursued with partial privatization for a sub-set of enterprises, a unique contribution of the study lies in investigating whether ownership divestiture through partial privatization has any effect once enterprises are imparted managerial autonomy, or whether ownership per se matters. Classifying state owned enterprises into three types, namely those that have been granted autonomy, those with autonomy and partially divested ownership, and those with neither, the study finds robust evidence of a positive impact of managerial autonomy on enterprise profitability. Additionally, once autonomy is controlled for, the study finds at best a weak effect of partial privatization. These results raise doubt on earlier findings of a robust positive effect of partial privatization in India in studies that did not explicitly control for enterprise autonomy thereby raising the possibility that the positive privatization effect that showed up was in actuality, an autonomy effect.

Short-Term Migration and Children’s School Attendance: Evidence from Rural India

Abstract: Every year, millions of individuals from rural India migrate internally for short periods in search of employment. Temporary migration of parents can affect school attendance of children from these families. This study uses data from National Sample Survey Organisation’s (NSSO) Situation Assessment Survey 2013 to examine whether having a short-term migrant member in the family affects school attendance of children aged 6–10 years in rural India. An estimate from logit regression suggests that controlling for individual and family characteristics, village, district controls and NSSO state-region fixed effects, being from a migrant family reduces the probability that a child aged 6–10 years attends school by 15%. A series of robustness checks are done to ascertain the reliability of our finding. First, we assess the extent of potential omitted variable bias and find that our results remain unchanged even after controlling for bias. Second, we use instrumental variable approach since short-term migration of parents and school attendance of children can be driven by unobserved factors. In this method, the presence of a short-term migrant in the family is instrumented by lagged proportion of short-term migrants and lagged proportion of construction workers in the district. Our results remain robust to various specifications.

Where Have All the Factories Gone? Growth and Concentration of Sub-National Manufacturing Activity in India

Abstract: The spatial distribution of manufacturing across the states of India is analyzed covering the period 2004-05 to 2015-16. We found that the spatial concentration of manufacturing activity has increased since 2004-05. More industrialized states (Maharashtra, Gujarat and Tamil Nadu) are found to have continued their dominance measured in terms of their share of output, factories and workers in manufacturing. They are observed to have captured a greater share of incremental growth of factories and workers. This outcome may be attributed to their comparative advantage due to agglomeration economies. Differences in the net entry of factories (and workers) in registered and unregistered segments of manufacturing are observed between different states of India. The estimates of net entry of factories in five selected industry groups in registered manufacturing are found to be consistent with agglomeration at the sectoral level.

Land-holding, participation in agriculture and short-term migration in rural India

Abstract: We analyse a nationally representative data set from India for the year 2013 in order to provide evidence on how short-term migration is affected by household ownership of land and participation in...

Chronic tyrosine kinase inhibitor (TKI) use in metastatic renal cell carcinoma (mRCC): can this lead to the adverse effect of hypogonadism?

Abstract: Background: Patients with metastatic renal cell carcinoma (mRCC) are commonly treated with tyrosine kinase inhibitors (TKIs). An adverse effect frequently suffered by patients is lethargy, which of...

Fragmentation Trade and Vertical Specialisation: How Does South Asia Compare with China:

Abstract: This article analyses the trends and patterns of export and fragmentation trade by South Asian countries—Bangladesh, India, Pakistan and Sri Lanka. To place the discussion in a comparative ...