State Business Relations and Economic Growth in Indian States

Asia Research Centre invites to a guest lecture by

Professor Kunal Sen, University of Manchester, on

"State Business Relations and Economic Growth in 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 effect of effective state-business relations on economic growth across Indian states over the period 1985-2006. We develop a measure that we argue captures the various dimensions of effective state-business relations in the Indian context. We then estimate standard growth regressions using dynamic panel data methods with this measure, and take into account possible reverse causality from strong economic growth to improvements in state business relations. Our results show that effective state-business relations contribute significantly to economic growth- Indian states which have shown improvements in state-business relations have witnessed higher economic growth, independent of other determinants of economic growth.

Kunal Sen is Professor of Development Economics and Policy in the Institute of Development Policy and Management (IDPM), University of Manchester, UK. His main research areas are finance and international trade. His current research examines the determinants of contract labour use in Indian manufacturing, state business relations and economic performance in Africa and India and the political economy of Indian growth. Some of the current research is being carried out within the DFID-UK funded Improving Institutions for Pro-poor Growth (IPPG) Research Programme Consortium, based in the University of Manchester, of which he is the Joint Director.

Past research has been to examine the interface between corporate finance and corporate governance, the impact of structural adjustment on investment and savings behaviour in developing countries, with particular reference to India; the determinants of rural poverty in India; the relationship between international trade and employment in developing countries; and the relationship between financial structure and international competitiveness. Professor Sen's recent books are Trade Policy, Inequality and Performance in Indian Manufacturing, London: Routledge 2008, International Competitiveness, Investment and Finance: A Case-study of India (with A.G. Kumar and R. Vaidya), London: Routledge 2003, and Saving, Investment and Growth in India (with P. Athukorala), Delhi: Oxford University Press, 2002. He has also published over 40 articles in journals including Public Choice, Review of Income and Wealth, Journal of Development Economics, Journal of Development Studies, and World Development. He has won the Sanjaya Lall Prize in 2006 and Dudley Seers Prize in 2003 for his publications.