Determinants of Total Factor Productivity Growth in India

Purpose: The paper identifies the structural determinants of total factor productivity (TFP) growth in India between 1990 to 2019. Design/Methodology/ Approach: To examine drivers TFP at aggregate level, ARDL models are used, whereas for identifying sectoral level determinants, panel pooled group mean estimation methods suggested by Peseran et al. (1999) and 2SLS-IV approaches used. Findings: empirical analysis suggests economic a significant portion variation is explained idiosyncratic shocks like deviations rainfall, exogenous global factors GDP rates. Public investment infrastructure, an increase share ICT capital fixed capital, improved exposure through higher exports inflows foreign direct (FDI) also associated with increased growth. At we find that input-producing sectors improvements labour qualities all India. Capital deepening manufacturing market services. Originality/Value: best our knowledge, this first attempt empirically estimate using KLEMS other nationally representative official data sources.