Services exports are growing much faster than merchandise exports and can promote economic growth by improving resource efficiency, boosting productivity growth, facilitating innovation, and technological advances, and diversifying the economy. In this context, this study examines the role of services exports in economic growth in China and India using data from 1980 to 2021. The choice of India and China is based on their recent export performances in services. Accounting for endogeneity issues and structural break, the study finds that merchandise and total and modern services exports promote economic growth in the long and short run, while traditional services have only short-run effects. Results from Robust Granger causality provide evidence of two-way causality between modern services and economic growth, validating the services export-led growth hypothesis. Further liberalization, integration of services with the manufacturing sector, and long-term investment in human capital are required to sustain higher services export growth.

Infrastructure development is a major factor of interstate inequality in India’s economic development; however, much less is known about the causes of unequal infrastructure development. Using 11 parameters, this study develops three separate indices: physical, social, and financial infrastructures. It also examines the differential determinants using the system generalized method of moments model for 18 major states in India from 2005 to 2019. The results show that economic factors such as economic performance, financial development, investment, and economic structure have a pivotal impact on physical infrastructure. In addition to economic factors, fiscal (investment, capital expenditure, and internal debt) and demographic (urbanization, agglomeration, and scheduled caste and scheduled tribe population) factors emerge as more relevant in the case of social infrastructure. Political factors play an equally important role in all three types of infrastructure development. The magnitude and significance of drivers vary across the type of infrastructure considered.

Passive investments such as exchange-traded funds (ETFs) provide an opportunity to invest in indexes, asset classes, and sectors with low maintenance costs and high transparency. Today ETFs dominate the world, with nearly 50% of the investment in the USA coming through ETFs. Numerous studies on specific aspects on ETFs have been done earlier; however, considering the scarcity of thorough summaries in the existing body of literature, this bibliometric and systematic review aims to adopt a methodical approach with the goal of delivering qualitative and quantitative understanding of ETFs, while highlighting general research trends. The authors analyzed 2058 articles associated with ETFs from the Scopus database during the last 50 years, i.e., from 1973 till date. The search was initially conducted using title, keyword, and abstract, yielding 2058 articles, which were narrowed to only include research papers and review papers, resulting in a final count of 958 items. The most important authors, highest cited articles, prominent journals, important themes, and associated countries have been identified using bibliometric research. The numerical and visual representations of the analysis show that ETFs are a widely studied research area, and the enormous rise in publications in 2020, 2021, and 2022 demonstrates that researchers are quite interested in the topic. According to affiliation statistics, most research is focused in the USA together with other developed nations, opening new options for the research on ETFs in relation to developing economies. The current analysis reconciles numerous exchange-traded fund studies associated with volatility, liquidity, risk-return trade-off, and tracking errors and identifies possible research gaps. Some of the emerging topics that evolved in passive investments include the use of machine learning, AI, and the emergence of ETFs associated with ESG and sustainability. This research will help lawmakers, scholars, and regulators understand the core principles of ETFs and identify areas that deserve additional investigation.

Globally, the remittances have increased significantly recently, most of which have gone to developing countries. In light of recent evidence of the role of remittances in economic development, it is pertinent to investigate how human development responds to remittances. Based on human capital and investment decision theory, the present study investigates the short and long-run asymmetric impacts on human development for six South Asian countries from 1990 to 2021 using the panel asymmetric autoregressive distributive lag model (PNARDL). A robustness check has been done using the dynamic common correlated effect pooled mean group effect model (CCEPMG). The direction of causality is examined using a panel dynamic heterogenous model. The result of this study indicates that remittances have a significant short and long-run asymmetric impact supporting the human capital and investment decision theory. Results suggest positive shocks promote human development while negative shocks have the opposite effect. Causality results suggest a two-way relationship supporting remittance-led human capital development in South Asia. In line with the above findings, the study recommends encouraging higher remittances and integrating development policies with migration policies to promote education, health, and human development.

This study contributes to the aid-development literature by examining the role of host country factors in conditioning the investment effect of foreign aid, covering a panel of six South Asian countries over the period 1990–2019. The study uses second-generation panel unit root, cointegration, and causality methods to control for endogeneity, cross-section dependency, and structural breaks. The study further applies the panel autoregressive distributed lag (ARDL) method of Pooled Mean Group (PMG) and the Common Correlated Effect Pooled Mean Group (CCEPMG) to estimate the long and short-run effects. The study results suggest that in the long run, foreign aid reduces or crowds out domestic investment directly but promotes domestic investment from the complementarity between aid and trade, human and financial development, and FDI. The causality result provides evidence of bi-directional causality between the two, supporting the crowding-out effect.

Remittances are the largest sources of foreign funds and are critical for economic development in South Asia. However, they have been found to damage the environment by promoting the production and consumption of energy-intensive products and pose challenges for achieving Sustainable Development Goals (SDGs). Against this backdrop, this study examines the role of remittances in environmental degradation using a sample of five South Asian countries from 1990 to 2021. A non-linear multivariate panel ARDL (NARDL) model is applied to investigate the asymmetric long and short-run relationship between the two. Cointegration results suggest that there is a stable long-run relationship among the variables. Empirical findings indicate that positive remittance shocks impact environmental degradation, and adverse shocks have a favourable effect. The causality results show one-way causality from positive and negative shocks to environmental quality, supporting the asymmetric relationship. The control variables, such as trade, financial development, and energy consumption, exacerbate environmental degradation while FDI improves the environmental quality. For robustness, the study uses Ecological Footprints (EPF) as an alternative proxy for environmental quality and confirms the asymmetric long and short-run link between remittances and environmental quality. Based on the results, an integrated approach combining the development and environmental goals is recommended.

Responses from 480 Indian respondents, 240 each investing in Mutual Funds and Exchange Traded Funds were studied to assess individual investors behavioral biases with the help of factors of herding, market, prospect, overconfidence and availability bias by using one way MANOVA approach. Results indicate that the Mutual Fund (active investment) investors show significantly higher behavioral biases as compared to Exchange Traded Fund (passive investment) investors in emerging markets. Behavioral biases effect on investments has been extensively studied on individual products, but this article is the first attempt to make comparative analysis of behavioral biases on active and passive investments. Behavioral biases have received little attention in the developing markets and results of this paper have practical implications for policymakers in understanding the dynamic behavior of the active and passive investors and educate the investors for proper investment decisions.

This research article seeks to provide a comprehensive review of climate investing and anticipated future developments by using bibliometric study. Climate investing is a well-researched subject of study, and the massive increase in publications in recent years indicate the breadth and depth of the topic. Affiliation statistics show that the majority of research is centered in the USA, Australia and the UK, offering up new possibilities for climate investing research in developing countries. The authors examined 1091 articles related to climate investing from the Scopus database since 1971, using the bibliometric review technique to provide numerous viewpoints from previous climate investing studies associated with carbon offsetting, green bonds, impact investing, sustainable stock indices, climate-themed funds, ESG screening, divestment from fossil fuels, climate-aligned funds, and climate-smart agribusiness and suggests future study directions. This research may be helpful to policy makers, particularly those from developing nations, in understanding the challenges of climate investing.

Infrastructure is vital for economic growth, industrial development, human development, and achieving the Sustainable Development Goals (SDGs). This article constructs a very compressive Rural Development Infrastructure Index covering three dimensions - physical, social, and institutional, using 28 indicators and identifies infrastructure disparities in rural areas across thirty-three districts and eight agricultural divisions of Maharashtra. The results indicate the enormous disparities among districts and divisions in the State. Districts like Sindhudurg, Kolhapur, Satara, Pune and Sangli perform very well. On the other hand, most of the laggard districts are in Marathwada and Vidarbha regions. The disparities are very high among districts within the physical infrastructure compared to social and institutional dimensions. Given the uneven infrastructure development in the State, the authorities need to undertake an infrastructure development programme to reduce infrastructure gaps among districts and regions. Indicators like irrigation facilities, all-weather rural roads and marketing facilities should be emphasised more, particularly in laggard districts such as Osmanabad, Beed, Hingoli, and Parbhani of Marathwada region, and Akola, Yavatmal, and Parbhani of the Vidarbha region.

Since the 1990s, there has been an increase in the volume of Foreign Portfolio Investments (FPI) flowing to developing economies. Theoretically, FPI inflows are supposed to promote economic growth by lowering cost of capital, increasing investment, diversifying risk and developing the financial sector. However, FPI—being short-term investments—may lead to boom and bust cycle affecting growth and stability. In this context, we empirically examine the impact of FPI on the economic growth for 82 countries for the period 2000–2017. We try to capture the differential effects of FPI across different categories of countries and transmission channels. Results reveal a positive relationship between FPI and economic growth for all sets of developing countries, with the magnitude of benefits being the highest for emerging economies. Moreover, domestic factors such as human capital, financial sector and external debt are found to influence the impact of FPI on growth. Therefore, there is a need to push for pro-FPI policies and develop the absorptive capacities of developing countries to promote and sustain their economic growth.

International migration not only provides external capital in the form of remittances, but also has many positive externalities – such as trade creation, financial development, skill development, technology diffusion, productivity enhancement, and capital accumulation – for low-income countries. In this context, this paper examines whether remittances crowd in or crowd out domestic investment using data from 24 low-income countries over the period 2004–2018. Using second-generation panel methodology that accounts for endogeneity problem and cross-section dependency among countries, the study finds that remittances crowd in domestic investment in the long run. The results further suggest that the crowding in effect is more pronounced in countries with more developed financial systems and higher human capital levels. The results from the panel causality test also support the crowding in hypothesis as there seems to be mutual feedback effect between the two. Thus, the empirical analysis in the study posits that remittances play a critical role in economic development by promoting domestic investment in the recipient countries.

Theoretical literature indicates that foreign direct investment (FDI) inflows can, directly and indirectly, promote exports by augmentation of domestic capital, technological and knowledge-based spillovers, improvements in competitiveness, and strengthening export channels. However, empirical studies have shown that the benefits of FDI for exports may not be automatic and could vary according to the characteristics of the recipient country. Accordingly, the objective of the current study is to understand the implications of foreign investment for exports of 93 developing countries during 2000–2017 using panel data analysis. It also distinguishes between different types of developing countries – dividing the sample into lower-income countries (LICs), lower and middle-income countries (LMICs), and emerging countries – to study the differential effects of FDI for these different country groups. The study finds that FDI complements exports, and the complementary effect is contingent upon the development levels of the host country. FDI is most effective for promoting exports for emerging countries and least effective for LICs. Accordingly, the study advocates for well-designed policies that prioritize channeling FDI to strategic sectors and push for improvements in the quality of human capital, financial markets, and infrastructure.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Remittances inflow to South Asian countries increased significantly and is now one of the major sources of external finance overtaking traditional capital inflows such as foreign direct investment (FDI), foreign portfolio investment (FPI) and aid. However, the role of remittances in economic development has not been examined extensively, particularly for South Asian countries. This article examines the impact of remittances on domestic investment for South Asia over 1991–2017. Advanced panel estimation methods (unit root, cointegration and causality) are employed to account for potential country-specific heterogeneity and the endogeneity problem. Results of this study suggest that remittances increase domestic investment in the short term as well as in the long run for South Asia. This indicates that remittances are used not only for consumption purposes but also for investment activities such as human and physical capital development. The panel causality results suggest the presence of uni-directional causality running from remittances to domestic investment. Therefore, the result of this study supports the theoretical argument and previous empirical studies for other developing countries JEL: C3, 01, F3, F22

AbstractIndia's prowess in the service sector has been recognised the world over. Sustaining services exports is important not only to sustain India's high growth rate but also to compensate for a consistent deficit in merchandise trade and to maintain stability on the external sector. In this context, we analyse the factors of India's performance in services exports over the past three decades. The results reveal that endowment factors such as human capital, improvement in physical infrastructure and financial development are key drivers for India's surge in services exports along with world demand, exchange rate and manufacturing exports. While factors such as institutions, R&D expenditure, telecommunication, foreign direct investment and financial development significantly impact the export of modern services, traditional services exports are more dependent on infrastructure development, manufacturing exports, world demand and exchange rate. India's economic reforms in the financial sector, FDI, communication so far have helped the services exports, but India needs to focus on supply‐side factors to improve the competitiveness – and thereby volume – of services exports.

The paper examines the growth and instability in exports of fish and fishery products from India and Odisha during pre- and post-WTO periods and identifies the factors responsible therefor. The study is based on secondary data collected from various official publications including Marine Products Export Development Authority (MPEDA). The study analyses the results using coefficient of variation and the instability index given by Erb and Schiavo-Campo. The findings clearly indicate that the mean growth rate of exports has increased in the post-WTO period over the pre-WTO period and the growth rate of exports from India to Japan, EU and SEA countries has shown a slight increase while for the USA,China and ME countries, there has been diminution. In case of exports from Odisha, the exponential growth rate of exports to all the countries except Japan and SEA has shown lower growth during the post-WTO period compared to the pre-WTO period. The instability Index has shown an increase in value in the post-WTO period over the pre-WTO period for both India and Odisha which indicates that exports of fish and fishery products have been more unstable in the post-WTO period in comparison to the pre-WTO period. It is suggested that in order to increase export earnings, target markets need to be positioned and developed, product differentiation and diversification to create more value addition should be encouraged and consumers need to be provided with information on products and exporters need to be connected with detailed information on the preferences and consumption patterns of specific consumer groups.

Fisheries constitute an important segment of the national economy and the sub-national economies along the coast line of India.But notwithstanding its contribution to NDP, employment, food and nutritional security, export earnings and high potential for inclusive development, slow growth and high instability remain the grim concerns for development of this sector.This paper analyses the development of fisheries sector in Odisha, a poor coastal state in India, by estimating the trend growth rate and instability indices during the preand post-WTO (World Trade Organisation) periods.The results indicate that both production growth and instability have been lower in the post-WTO period relative to the pre-WTO period.While production growth has slowed down because of lower growth in exports following the WTO conditions, instability has declined mainly due to underproduction.Government provisioning of primary, secondary and tertiary infrastructure is suggested to achieve smooth and high growth of the sector. I. Introduction 1.1 BackdropFisheries, marine fisheries in particular, constitute an important sub-sector of the primary sector of the Indian economy both at the national and sub-national levels.This segment makes immense contribution to the economy in terms of employment and livelihood, provision of protein and food security, net domestic product and foreign exchange earnings.It has a huge linkage effect in the economy with the backward linkage operating through investment, employment and growth in boat, trawler and net making units and the forward linkage working through those in ice plants, cold storage, processing, transportation, marketing and other related activities.Although fishing, both marine and inland, is as old as human civilization, its enormous potential as an internationally tradable activity was increasingly felt only during the 1980s.With a maiden start in fisheries as a commercial venture in the 1980s, this sector has gradually grown over the years to its present giant status.The operations in fisheries have undergone a sea change with the low profile traditional and low key individual and community approaches to fishing wielding to a highly commercial, industrial and corporate business approach.The dynamics of this enterprise is well manifested in its international exposure, technological innovations and technology sharing, alignment to various quality parameters, competitive pricing and greater value addition.Exporters and export houses, the relatively new stakeholders in this business, have played a vital role in protecting fishermen from overproduction and excess supply, providing them price protection and earning foreign exchange for the nation/ state.Consequent upon these developments and innovative and efficient fishing practices, developed harvest and post-harvest infrastructure, growing domestic and international demand for sea food products and fisheries-friendly government policies, the marine fishery sector has experienced spectacular growth since the 1990's.The introduction of massive economic reforms in India and the associated liberalization, privatization and globalization regime (popularly known as LPG model) of managing the economy since 1991 has opened up the marine fisheries sector to the world market.Looking at the tremendous export and foreign exchange earnings potential of this sector, it was initially thought during the early years of economic reforms that the LPG measures would attract private capital, increase competition, improve efficiency, promote quality production and exports, augment foreign exchange earnings and give a boost to the marine fisheries activities in the economy.The establishment of WTO in 1995 is a milestone in the realm of institutional arrangement for international trade in goods, services, knowledge and technology.It became functional for the fishery sector in 2001 during the Doha round of talks, nearly one decade after the implementation of economic reforms in India.Like the reform measures implemented by the government of India, the WTO provisions were also intended to promote free flow of goods, services, capital, technical knowhow etc. worldwide with the member countries mandated to grant the most favored nation status to all of them.These two developments were self-reinforcing in nature.Both of them not only promised good returns in terms of capital inflow, technology upgradation, enhanced competition and efficiency and expanded economic opportunities including trade and growth in