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Article
Publication date: 5 August 2019

Vaseem Akram and Badri Narayan Rath

The purpose of this paper is to examine the convergence analysis of public debt among Indian states using annual data from 1990‒1991 to 2014‒2015.

Abstract

Purpose

The purpose of this paper is to examine the convergence analysis of public debt among Indian states using annual data from 1990‒1991 to 2014‒2015.

Design/methodology/approach

The paper tests this hypothesis using club convergence technique propounded by Phillips and Sul (2007).

Findings

The results reveal the existence of debt divergence for overall Indian states. States are formed into four clubs on the basis of their level of debt, and three clubs support the hypothesis of club convergence. Further, the total public debt decomposes into three compositions such as market loans, bank loans and loans and advances from the central government. The existence of convergence is found for market loans and bank loans; however, the presence of divergence is found in case of loans and advances for overall states.

Practical implications

Since public debt plays an important role for fiscal health of the Indian states, findings of this study suggest to squeeze the fiscal consolidation further for Indian states whose debts as a percentage to gross state domestic product are on the higher side. Further, the examination of debt convergence helps to manage debt level among the states because heavy dependence on public debt could retard investment and economic growth.

Originality/value

Whereas bulk of empirical studies emphasize on examining the linkage between public debt and economic growth, and issue on debt sustainability across Indian states, examination of convergence of debt and its compositions (markets borrowings, bank loans and loans and advances from the central government) among the Indian states is scanty.

Details

Journal of Economic Studies, vol. 46 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 28 October 2014

Nicholas Apergis, Christina Christou and Christis Hassapis

This paper aims to explore convergence of accounting standards across worldwide adopted measures to investigate whether countries that have not completely adopted…

Abstract

Purpose

This paper aims to explore convergence of accounting standards across worldwide adopted measures to investigate whether countries that have not completely adopted International Accounting Standards across the globe have displayed a tendency to act so.

Design/methodology/approach

The new panel convergence methodology, developed by Phillips and Sul (2007), is employed.

Findings

The empirical findings suggest that countries form distinct convergent clubs, albeit on a limited prevalence, yielding support to the notion that on a global basis firms and countries have initiated processes that will eventually lead them to a uniform pattern of employing common accounting standards.

Practical implications

These findings have substantial implications on a firm level, mainly for differences in accounting quality as well as for differences in their cost of capital, thus leading the regulatory authorities to opt for further improvements in financial reporting.

Originality/value

The novelties of this paper first, stem from the fact that it is the first time in the relevant literature that an empirical study attempts to formally measure whether the accounting world exhibits a tendency for accounting standards convergence or whether tactics and policies remain stagnant, acquiring drastic policy measures to speed up the convergence process. In addition, this study employs the implementation of the new methodology of panel convergence testing. This methodology has several appealing characteristics.

Details

Accounting Research Journal, vol. 27 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

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Book part
Publication date: 4 March 2015

Matei Alexianu

The post-Soviet space, consisting of the countries of the former USSR and the Warsaw Pact, is a good testing ground for the dynamics of growth. Motivated by the mixed…

Abstract

The post-Soviet space, consisting of the countries of the former USSR and the Warsaw Pact, is a good testing ground for the dynamics of growth. Motivated by the mixed evidence on economic convergence in the region, this paper explores why countries have performed differently, focusing on institutional strength and its determinants. It proposes the hypothesis that, in the region, Russian influence plays a negative role in institutional development, both through opaque business practices that come with it, and through the isolation from European Union influence it entails. The paper uses recent panel data to test this hypothesis, concluding that there is some evidence supporting a negative effect of Russian influence on post-Soviet states’ institutions, but that more rigorous analysis is needed to confirm this link.

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