Empirical Study of the Effects of One District One Product (ODOP) Initiative on Indian Export Performance: A Panel Data Analysis

Abstract

One District One Product (ODOP) scheme in India was based on the vision of converting the districts into manufacturing and export zones and thus enhance equal regional development and economic growth. This paper focuses on the effectiveness of ODOP in terms of export performance in Indian states and union territories by using a balanced panel dataset that consists of 36 cross-sectional units observed between 2018 and 2021. A generalized least squares (GLS) regression model had been used to examine the short-term and time-varying impacts of ODOP with Gross State Domestic Product (GSDP) and the Human Development Index (HDI) as the control variables. The findings show that ODOP effects exports positively in the long run as shown by the marginally significant interaction between ODOP and post implementation time. GSDP is an influential and statistically significant predictor of export performance positively underscoring the possibility of underlying economic capacity. In the form of descriptive analyses, there is also a considerable variation between weak and strong ODOP implementation in terms of export outcomes, and the steep recovery in terms of mean exports in the post-2020. Further research could examine longer time spans and using data at the district level, which, in turn, will allow assessing the structural implications of the ODOP scheme more meticulously. Moreover, the incorporation of new econometric models and other policy factors might improve the ability to causally infer and provide a more comprehensive view of the long-term effectiveness of the scheme.