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No. 359

April 2010

Vol XC

ISSN 0019-5170

Contents


Econometric Analysis of Non Performing Assets of Banks in Uttarakhand A Case Study

R. R. Nautiyatt and R. Datta


Non Performing Assets (NPAs) are said to not only affect the profitability, liquidity and competitive functioning of banks but also the psychology of the bankers in respect of their disposition towards credit delivery and credit expansion. It acts as a hindrance in the normal resource allocation process essential for development. lt is a common opinion that more of social banking gives rise to NPAs. ln this paper our endeavour is to find out using OLS regression technique, out of the two main variables of social banking namely Priority Sector Advances (PSAs) and Weaker Section Advances (WSAs) which factor contributes more in the formation of NPAs in the banks in the hill state of Uttarakhand.


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Per Capita Expenditure Elasticities A Cross-Sectional Study by Income Group in Telanagana Region, Andhra Pradesh

I. Daisy


The empirical results based on the primary data collected from the selected sample household belonging to different income groups reveal that the elasticity of Percapita consumption expenditure on food items with respect to total Percapita expenditure is less than one in all income groups revealing the fact that the proportion of Percapita total expenditure incurred on food items declines with the increase in total Percapita expenditure across the household in all income groups. In case of non-food items, the elasticity of Percapita expenditure with respect to total Percapita expenditure is more than unity in all income groups explaining the fact that the proportion of total Percapita expenditure increased on non-food items goes on increasing with the increase in per capita total consumption expenditure across the sample households in all income groups.


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Decision for Ration off Take: An Empirical Experience in the District of Burdwan, West Bengal

Maniklal Adhikary and Rajat Jyoti Sarkar


India has been living with food shortages for a very long period. Famines, wars and droughts play ominous role in causing acute scarcity conditions that forced die Government to undertake "Fire fighting" measures from time to time like suspending normal activities of market, and trade through nationalization of wholesale trade, organization of food zones ( for purposes of procuring food grains from surplus zones a.-distributing them to deficit zones), introduction of statutory rationing in selected urban areas etc. so improving food security at the household level very much important for a developing country like India where millions of poor suffer from persistent hunger and malnutrition. In India Public Distribution System is the most important food security measure.

In order to examine the performance of Public Distribution System in the District of Burdwan in West Bengal we conducted a sample survey. But surprisingly enough, we see that many poor households are not willing to draw their full quota of ration food grains. Generally, it is assumed that the poor households will draw their full quota of ration food grains to meet their minimum calorie requirement and consumption level, as they cannot purchase from the open market the required amount of foots grains at higher price due to their financial incapacity. But, in realty, we see the reverse, In spite of weak economic capacity of the poor households, the off take, of ration food grains is much lower than the allocation of ration food grains. This means that many poor households are not drawing their full quota of ration food grains. This is a fact we noticed in the District of Burdwan and this scenario has slapped a strong blow to our minds so that our commonsensical faith and belief that if the Government arrange for supplying food grains to the poor through the fair price shops the food security will be ensured, have been shattered. So, this is the backdrop of this study. In this paper we have tried to analyze the basic reasons behind such surprising scence. We have been prompted by this peculiar fact to search for the factors that are responsible to determine the decision for ration off take of the poor households.


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Efficiency of India's Capital Market-An Empirical Analysis

P. K. Mishra

The concept of efficient market hypothesis is gaining importance in the aftermath of integration of India's economy with world economies. With the increasing relevance of Fits, an informationally efficient capital market holds far reaching implications for its stable growth as well as for the economic growth of the political economy of a country. Thus, the understanding of efficiency of capital market of India in the dynamics of the stock markets is essential. There is sufficient evidence in favour of capital market efficiency in developed markets. But the same is often not valid in emerging markets. This paper studies the efficient market hypothesis in its weak form in the frame work of random walk model for NSE in India from 2001 to 2008. The ADF, DF-GLS, and PP tests are used to examine stock market efficiency. The results support that the stock markets of India do not follow random walk, rejecting the weak form efficient market hypothesis.

Key Word: Random Walk, Market Efficiency, Unit Root Test.

JEL Classifications: C22, E44, GI4.


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Infrastructural Services and Manufacturing Growth in Nigeria: A Dynamic Analysis

Olorunfemi Solar


This study examines the direction and the strength of the relationship between infrastructural services and manufacturing output in Nigeria using time series data from 1981 to 2005. The study examines the unit root problem and cointegrating properties of the data. The unit root problem was tested for by using Augmented Dickey - fuller (ADF) and Phillip Perron tests. To determine which of the shocks are the primary causes of variability in the endogenous variables, tire study used Vector Autoregressive (VAR) model. Also Granger causality test was carried out. Results showed that the present transport and electricity service in Nigeria did not cause growth to occur in the manufacturing sector. It was also revealed in the study that telecommunication and education had contributed to the growth in the manufacturing sector. The paper recommends that a centrally coordinated, internally consistent and a holistic approach that would encompass uniform standard, a maintenance culture and a linkage between the various sector or the economy toward the development of infrastructure services is important to the development of manufacturing sector.


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Impact of Economic Factors on Urban Land Price Behaviour

V. Sampathkumar and M. Helen Santhi


This study analyses the factors correlated with land price and estimate the future land price by applying the pricing model which incorporated economic factors. A Land price model derived from step-wise regression analysis is developed for Tambaram Township in Chennai Metropolitan Area. Correlation analysis has been carried out to study the impact, as well as the association of the land price and the independent variables. The coefficient of regression (R2) indicates that about 99.5 percentage of the land price is explained by this multiple regression model.

Index Terms Land Price, economic factors, step-wise regression analysis, land price model, future trend.


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Stochastic Models for Unemployment in a Region

K. Srinivasa Rao, G.V.S. Rajkumar, and B.V.S. Narayana


In this paper, we develop a stochastic model for number of unemployed persons of a region in an employment exchange and analysis is carried with the assumptions that the enrollment in the employment exchange is Poisson and recruitment process in that region is also Markovian. The characteristics of the model are derived and analysed through obtaining the explicit expressions for the mean number of unemployed persons, variance of the number of unemployed, the distribution of unemployment period, the force of absorption (rate of employment), the joint probability distribution of number of persons recruited and number of persons waiting for job, the distribution of number of persons recruited (luring the time T, etc,. The sensitivity of the model with respect to the parameters is also discussed. These models are useful in analysing the situations arising in developing countries like, India in order to assess the economic development of the nation.


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The Negative Impacts of Globalisation Logics on Labour Markets

Wilfred I UKPERE


There are polarising views about globalisation. Some sections have argued that it is merely capitalism, while others believe that it is internationalisation. Still others say that it is a product of technological explosion, which has resulted in deterritorislisarion or supraterritorialisation. 'these varied views arc quite important Therefore, to take one or two variables mentioned as a basis for an analysis of globalisation, would lead to a redundant concept of global isation. Hence; globalisation is capitalism, however, capitalism is not globalisation; globalisation is internationalisation, however. internationalisation is not globalisation; globalisation is technological explosion, however, technological explosion is not globalisation; globalisation is deterritorialism, however, deterritorialismn is not globalisation; and globalisation is supraterritorialism (transnationalism), however, supraterritorialism is not globalisation. Since globalisation represents all others while all others do not fully represent globalisation, its distinctiveness is delineated. Other major areas in which current globalisation can be distinct from other prodigies are within the logics of a rise in the speculative movement of funds, astronomic increases in international trade, explosive international amalgamations and acquisitions, transnationalisation of production, advanced sophisticated technological innovation, increasing numbers, activities and powers of transnational corporations and, within the logic of global competition. This paper contends that these globalization logics have detrimental implications for labour markets.

Keyowords: Capitalism, Globalisation, Internationalisation, Speculative capital, Technological explosion, Transnationalisation.


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Inter-State Disparities in India under Liberalized Regime: Dimensions and Determinants

Kulwant Singh Phull


The present paper attempts to examine the trends, dimensions and determinants of Inter-State Disparities in India under the liberalized regime, using cross-sectional data regarding 12 selected indicators, among the 15 major states at three, different periods of time: 1990-91, 2000-01 and 2004-05, using Coefficient of Variation, factor Analysis and Stepwise Backward Multiple Regression. The paper found that although no major change has been observed in the relative position of almost all the selected states, yet the degree of inter-state disparities have been eased to some extent. This decline in the dimensions has been due to any development of the bottom line states, but the same attributes to the slow growth of the top ranking states, particularly Punjab and Maharashtra. The study further observed that variables like: Per Capita Invested Capital in Factory Sector (PIC), Per Capita Net Value Added in Manufacturing Sector (PVM) and Per Capita Milk Production (PMP) were the most significant determinants of inter-state disparities. Hence, the study highlights the need to encourage investment in manufacturing sector along with diversification of agriculture, especially in the backward states, to induce the developmental effort accompanied by fiscal discipline, good governance and institutional reforms, in order to further ease the inter-state disparities in the country.


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Process of Trade Transformation and Impact Analysis: Case of ASEAN-4

Myo Oo Lwin


This paper examines the importance of export trade between ASEANA and their trade partners (or foreign investor countries) amid the changing trade structure brought about by structural changes in production at different stages of their development. The first part reviews the evolution of the production and trade structures of the ASEAN-4 over time and discuses the theories that account for the changes. The second part investigates how structural changes in production and subsequently in export trade led not only to the economic growth of the ASEAN-4 but also to the upgrade of their technological levels for survival. An econometric trade model between ASEANA and their main trade partners (USA and Japan) is developed to measure export growth under structural change incorporating the role of foreign direct investment inflows to highlight technological innovation in this research. The last part analyzes the effects of these structural changes on the economic development of the ASEAN-4 and presents the changing scenario for the economy of the ASEAN-4.


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Impact of Trade Liberalization on External Debt Burden: Econometric Evidence from Pakistan

Sabahat and Mohammad Sabihuddin Butt


Pakistan's leading challenge today is to lesson its debt burden in order to pursue a path that leads toward sustainable and impartial growth for poverty diminution. The consequences of trade liberalization are of growing concern, mainly in the emerging economies with severe brim over effects on their debt situation. The major objective of this paper is to discuss the current external debt problem in Pakistan and analyze how its external debt is interrelated with trade liberalization policies and measures. Using data from the last three decades, this paper investigated whether there exist a momentous relationship between external debt and the trade liberalization variables or not. In this case study ARDL bounds testing approach is employed to investigate the long run relationships and Error Correction Method (ECM) for short run dynamics. After finding the order of integration through implementing the Augmented Dickey Fuller (ADF) and Phillips-Perron unit root tests, our fording suggested a significant long run positive association between external debt and trade liberalization is existed in case of Pakistan.


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Adoption of Land Enhancing Technologies in the Northern Guinea Savanna of Nigeria

A. A. Akinola, R. Adeyemo and Arega D. Alene


This study used Tobit model to assess the adoption and intensity of use of inorganic fertilizer and manure. Multi-stage sample technique was used to collect data from 400 household in selected villages of Kaduna State in the Northern Guinea Savanna of Nigeria. The results showed that availability of labor, social capital; livestock and asset ownership as well as extension contacts were 'positively significant in determining farmers' preference for inorganic fertilizer. On the other hand, farmers' adoption decisions for manure were positively and significantly influenced by availability of labor, off-farm incomes and extension contacts. However, tarm size had a negative significant influence on both technologies. The study indicated that creating incentives for farmers to become members of farmers' unions would increase adoption and use intensity of inorganic fertilizer. Policy intervention that institutionalizes micro-finance in the rural area and increased draft power and equipment for fertilizer and manure application would favour increased use of both inputs. Moreover, efforts should be made to produce organic manure in situ and insert pastoralists into exchange networks of the community.


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Education and Unemployment in a Job-Search Model

Titas Kumar Bandopadhyay


This paper aims to extend the Fields (1989) model by introducing capital and international trade. The present paper also examines the relation between education and unemployment when education enhances the job-search efficiency. In particular, it attempts to show that free education policy accentuates the problem of unemployment in a job-search model where capital is mobile across sectors.

Key Words: Education, unemployment, job-search.

Jel Classification: J64


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