DISTRICT-LEVEL CONVERGENCE AND PUBLIC BANKS IN INDIA

9 Pages Posted: 6 Apr 2021

See all articles by Robert Beyer

Robert Beyer

World Bank - South Asia Chief Economist Office

Takahiro Yamada

World Bank

Date Written: August 13, 2020

Abstract

This study updates previous findings on district level convergence in India and analyses the role of financial development on economic growth. Using a new nighttime light product as a proxy for economic activity, it finds an absolute rate of convergence of 2.4 percent from 2013 to 2019. Conditional on socioeconomic characteristics, the rate of convergence was 3.7 percent. Stronger initial financial development resulted in faster subsequent growth, with the effect being twice as large for credit extended by public banks compared to credit extended by private banks. For districts with below median nighttime light intensity in 2013, the impact of public credit was three times larger, indicating a strong developmental role of public banks in India.

Keywords: India, convergence, nighttime lights, financial development, public banks

JEL Classification: G21, O11, O47, R11

Suggested Citation

Beyer, Robert and Yamada, Takahiro, DISTRICT-LEVEL CONVERGENCE AND PUBLIC BANKS IN INDIA (August 13, 2020). Available at SSRN: https://ssrn.com/abstract=3818578 or http://dx.doi.org/10.2139/ssrn.3818578

Robert Beyer

World Bank - South Asia Chief Economist Office ( email )

1818 H Street, NW
Washington, DC 20433
United States

Takahiro Yamada (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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