Assessing India’s productivity trends and endogenous growth: New evidence from technology, human capital and foreign direct investment
The study evaluates the role of R&D, human capital, and technology spillovers in influencing India’s long-run productivity growth. The primary contributions of the article are: analyzing the applicability of various endogenous growth models in the Indian context, while only R&D driven endogenous growth models have been studied so far, highlighting the role of technology spillovers through FDI and import channels in affecting India's productivity at the aggregate level, as opposed to the existing industry level analysis and, the first study to identify the potential non-linear effects of the variables of interest. The main findings are: FDI and human capital influence India's long-term productivity growth, while R&D based models or technology spillovers via the import channel show mixed evidence of support, the decline in FDI has had a more adverse effect on the economy than the positive effect of increased FDI. Therefore, sustained increase in human capital and FDI is recommended.