Growth Appraisals of Indian Sugar Industry and Its Drivers- A Dynamic Panel Data Analysis

Abstract

This research paper is an endeavor to analyze the significance of the growth of Indian sugar industry in overall economic growth of the nation. For analysis purpose, panel data cointegration analysis has been applied on the dataset of 12 major sugar producing states over the period 1974/75 to 2004/05. The empirical analysis reveals that growth of the sugar industry significantly contributes to overall economic growth of states under evaluation. Further, the analysis of the drivers of output growth in Indian sugar industry reveals that given the highest inputs elasticity of sugar output, LNIGIN (i.e., index of growth of inputs) is the most significant variable to accelerate growth of Indian sugar industry. Further, except LNPEIN (managerial efficiency change index), all other variables namely, LNSEIN (scale efficiency change index), LNPTIN and LNIBIN (Indices of Hicks neutral and non-neutral types of technical progress, respectively) contribute positively and significantly to the growth of Indian sugar industry. Keywords: Panel Data Cointegration, Auto-regressive Distributed Lagga Models, Malmquist Productivity Index, Indian Sugar Industry.

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