Gross Domestic Product Growth Correlations : Multi Country Study with Focus on China and India

Abstract: Analyses of the dependence of the Gross Domestic Product (GDP) growth rates on seven variables; Logistic Performance (LGI), Corruption Perceptions Index (CPI), Foreign Direct Investment (FDI), Adult Literacy Rate (ADLR), Gini Index (GI), % Service Share of the GDP (SSG) and Global Innovation Index (GII) have been performed in this study. A regression model has been presented where growth rate is taken as a function of seven factors. It has been seen that Gini Index, Foreign Direct Investment and level of corruption Index has shown positive correlation with the growth. However, service share of GDP has shown negative correlation with the growth. This reflects that increase in FDI can increase the growth and increase in corruption can decrease the growth. Manufacturing or industry sector % should increase as service % has shown a negative correlation. GII, ADLR and LGI have not shown any significance in the regression analysis. The model has been further used to compare the growth perspective for China and India. It has been seen that India has certain advantages such as demographic dividend and democratic governing model which can help in sustainability of the growth.