Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Satya Prasad Padhi ¹

Affiliations
1 Department of Economics, Punjab University, Chandigarh 160 014, IN

Abstract

The present paper shows that regional FDI inflows (on the approval basis) conform to a regional divergence process where already rich states in terms of existing manufacturing bases (or gainers in terms of per capita income) are the gainers. This makes the interstate competition policy irrelevant in the sense that (1) incentives independent of growth centers do not play role in attracting FDI inflows; (2) incentives should form the part and parcel of regional policies that try to develop manufacturing bases in backward regions via growth centers.

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Satya Prasad Padhi ¹

Affiliations
1 Department of Economics, Punjab University, Chandigarh, IN

Abstract

The focus is on the significance of the measure of productivity growth in the index form in individual industries operating under imperfectly competitive market environment. In general, these measures are dependent on a measure of changes in value added per unit of output, which is partly due to change in marginal cost conditions reflecting efficiency in resource use and partly due to differential increases in price of the product and marginal material cost conditions reflecting returns from market power. A divisia source of growth equation is used to measure the changes in valued added per unit of output which corrects the measure for any change in market power, and thereof allows the 'real' measure of productivity growth in tire index form. The corrected measure in turn forms the basis of a proper interpretation of productivity growth in terms of embodied technical change in the context of individual industries.

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