Do Effective State Business Relations Matter for Economic Growth? Evidence from Indian States

Effective state–business relations are a set of highly institutionalised, responsive and public interactions between the state and the business sector. This paper examines the impact of effective state–business relations on economic growth across Indian states over the period 1985–2006. We propose a...

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Bibliographic Details
Published in:World development 2011-09, Vol.39 (9), p.1542-1557
Main Authors: Calì, Massimiliano, Sen, Kunal
Format: Article
Language:English
Subjects:
Asia
Business
Business community
Business government relations
Economic Development
Economic growth
Economics
Effectiveness studies
Estimation
Government-business relations
India
Indians
Institutionalization
Institutions
Interaction
Panel Data
Political economy
Private Sector
Regression analysis
state-business relations institutions economic growth Asia India
state–business relations
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Summary:Effective state–business relations are a set of highly institutionalised, responsive and public interactions between the state and the business sector. This paper examines the impact of effective state–business relations on economic growth across Indian states over the period 1985–2006. We propose a measure that captures the various dimensions of effective state–business relations at the sub-national level, and estimate standard growth regressions using dynamic panel data methods. Our results show that effective state–business relations contribute significantly to economic growth and appear to be driven by the intensity of the interactions between the state and the private sector.
ISSN:0305-750X
1873-5991
DOI:10.1016/j.worlddev.2011.02.004