Indian Journal of Industrial Relations: Economics & Social Dev.

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Entrepreneurship & Inequalities in India: An ARDL Bounds Testing Approach


Affiliations
1 Senior Research Fellow, University Business School, Panjab University, Chandigarh, India
2 Senior Research Fellow, Department of Evening Studies, Multi-Disciplinary Research Centre, Panjab University, Chandigarh, India
     

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This study revisits the link between entrepreneurship and income inequalities in India over the period 1981- 2017 using the Autoregressive Distributed Lag (ARDL) Bounds Testing Approach of Cointegration and Error Correction Model (ECM). The study is based on the registered manufacturing sector with Gini coefficient being used as a proxy of income inequality and gross capital formation and profits earned being used as an indicator of entrepreneurship. It finds that capital formation has a positive impact on Gini coefficient in the shortrun; In the long-run, the impact is negative. It also reveals that an increase in Gini coefficient increases the profits in both short-run and longrun, the profits in turn decreases Gini coefficient in short-run. The study concludes that there exists a two-way association between entrepreneurship and income inequalities in India.
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  • Entrepreneurship & Inequalities in India: An ARDL Bounds Testing Approach

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Authors

Poonam Sharma
Senior Research Fellow, University Business School, Panjab University, Chandigarh, India
Kajal Gupta
Senior Research Fellow, Department of Evening Studies, Multi-Disciplinary Research Centre, Panjab University, Chandigarh, India

Abstract


This study revisits the link between entrepreneurship and income inequalities in India over the period 1981- 2017 using the Autoregressive Distributed Lag (ARDL) Bounds Testing Approach of Cointegration and Error Correction Model (ECM). The study is based on the registered manufacturing sector with Gini coefficient being used as a proxy of income inequality and gross capital formation and profits earned being used as an indicator of entrepreneurship. It finds that capital formation has a positive impact on Gini coefficient in the shortrun; In the long-run, the impact is negative. It also reveals that an increase in Gini coefficient increases the profits in both short-run and longrun, the profits in turn decreases Gini coefficient in short-run. The study concludes that there exists a two-way association between entrepreneurship and income inequalities in India.

References