Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy
This paper investigates the determinants of productivity in Indian manufacturing industries during the period 1988-2000. Using two-digit industry level data for the Indian states, we find evidence of imperfect interindustry and interstate labor mob...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/05/7611962/indian-manufacturing-slow-sector-rapidly-growing-economy http://hdl.handle.net/10986/7112 |
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okr-10986-7112 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ADVERSE IMPACT AGGREGATE LEVEL BILATERAL TRADE BOOK VALUE BUREAUCRATIC QUALITY CAPITAL ACCUMULATION CAPITAL GOODS CAPITAL STOCK CENTRAL PLANNING COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS CONTRACT LABOR CURRENCY DEBT DEFLATORS DEMAND CURVE DEMOCRATIC PROCESSES DEREGULATION DEVALUATION DISMISSAL DIVISION OF LABOR ECONOMIC AGENTS ECONOMIC ENVIRONMENT ECONOMIC GROWTH ECONOMIC INSTITUTIONS ECONOMIC PERFORMANCE ECONOMIES OF SCALE ELASTICITY EMPLOYEE EMPLOYMENT EMPLOYMENT PERFORMANCE ENTRY BARRIER EXPENDITURE EXPENDITURES EXPORT INCENTIVES EXPORT MARKETS EXPORT-ORIENTED INDUSTRIES EXPORTS FACTOR RETURNS FAIR FINAL GOODS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE GDP GOVERNMENT EXPENDITURE GROSS OUTPUT GROWTH LITERATURE GROWTH MODELS GROWTH RATE GROWTH REGRESSIONS HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE REFORMS IMPORT PENETRATION INCOME INCOME LEVELS INCREASE IN LABOR INDUSTRIAL POLICY INFLATION INTERMEDIATE INPUTS INTERNATIONAL TRADE JOB SECURITY LABOR CONTRACTS LABOR DEMAND LABOR DEMAND ELASTICITY LABOR LAWS LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKETS LABOR MOBILITY LABOR PRODUCTIVITY LABOR REALLOCATION LABOR REGULATIONS LAYOFF LEVELS OF OUTPUT LICENSING RESTRICTIONS MACROECONOMIC CRISIS MANUFACTURING INDUSTRIES MARKET CONDITIONS MARKET IMPERFECTIONS MARKET RESTRICTIONS MARKET SIZE MONOPOLIES MONOPOLY MORAL HAZARD ON-THE-JOB TRAINING OPENNESS PER CAPITA INCOME PERMANENT WORKERS POSITIVE EFFECTS PRICES OF OUTPUT PRIMARY SOURCE PRIVATE FIRMS PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTION WORKERS PRODUCTIVE FIRMS PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY GROWTH RATES PRODUCTIVITY LEVEL PRODUCTIVITY LEVELS PROPERTY RIGHTS PROTECTED INDUSTRIES QUANTITATIVE RESTRICTIONS RATES OF PROTECTION REAL EXCHANGE RATE REDUCTION IN TARIFFS RELATIVE PRICES RIGID LABOR MARKET RIGID LABOR MARKETS SEVERANCE PAYMENTS SKILLED WORKERS SPECIALIZATION STOCKS SUBSTITUTES TARIFF BARRIERS TARIFF LEVELS TARIFF RATE TARIFF RATES TECHNOLOGY TRANSFER TOTAL CAPITAL STOCK TOTAL FACTOR PRODUCTIVITY TOTAL WAGE TRADE BARRIERS TRADE FLOWS TRADE LIBERALIZATION TRADE LIBERALIZATION INCREASES TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE PROTECTION TRADE REFORM TRADE REFORMS TRADE REGIME VALUE ADDED VOLATILITY WAGE BILL WAGE RATE WAGES WEALTH WHOLESALE PRICE WHOLESALE PRICE INDEX WORKER |
| spellingShingle |
ADVERSE IMPACT AGGREGATE LEVEL BILATERAL TRADE BOOK VALUE BUREAUCRATIC QUALITY CAPITAL ACCUMULATION CAPITAL GOODS CAPITAL STOCK CENTRAL PLANNING COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS CONTRACT LABOR CURRENCY DEBT DEFLATORS DEMAND CURVE DEMOCRATIC PROCESSES DEREGULATION DEVALUATION DISMISSAL DIVISION OF LABOR ECONOMIC AGENTS ECONOMIC ENVIRONMENT ECONOMIC GROWTH ECONOMIC INSTITUTIONS ECONOMIC PERFORMANCE ECONOMIES OF SCALE ELASTICITY EMPLOYEE EMPLOYMENT EMPLOYMENT PERFORMANCE ENTRY BARRIER EXPENDITURE EXPENDITURES EXPORT INCENTIVES EXPORT MARKETS EXPORT-ORIENTED INDUSTRIES EXPORTS FACTOR RETURNS FAIR FINAL GOODS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE GDP GOVERNMENT EXPENDITURE GROSS OUTPUT GROWTH LITERATURE GROWTH MODELS GROWTH RATE GROWTH REGRESSIONS HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE REFORMS IMPORT PENETRATION INCOME INCOME LEVELS INCREASE IN LABOR INDUSTRIAL POLICY INFLATION INTERMEDIATE INPUTS INTERNATIONAL TRADE JOB SECURITY LABOR CONTRACTS LABOR DEMAND LABOR DEMAND ELASTICITY LABOR LAWS LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKETS LABOR MOBILITY LABOR PRODUCTIVITY LABOR REALLOCATION LABOR REGULATIONS LAYOFF LEVELS OF OUTPUT LICENSING RESTRICTIONS MACROECONOMIC CRISIS MANUFACTURING INDUSTRIES MARKET CONDITIONS MARKET IMPERFECTIONS MARKET RESTRICTIONS MARKET SIZE MONOPOLIES MONOPOLY MORAL HAZARD ON-THE-JOB TRAINING OPENNESS PER CAPITA INCOME PERMANENT WORKERS POSITIVE EFFECTS PRICES OF OUTPUT PRIMARY SOURCE PRIVATE FIRMS PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTION WORKERS PRODUCTIVE FIRMS PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY GROWTH RATES PRODUCTIVITY LEVEL PRODUCTIVITY LEVELS PROPERTY RIGHTS PROTECTED INDUSTRIES QUANTITATIVE RESTRICTIONS RATES OF PROTECTION REAL EXCHANGE RATE REDUCTION IN TARIFFS RELATIVE PRICES RIGID LABOR MARKET RIGID LABOR MARKETS SEVERANCE PAYMENTS SKILLED WORKERS SPECIALIZATION STOCKS SUBSTITUTES TARIFF BARRIERS TARIFF LEVELS TARIFF RATE TARIFF RATES TECHNOLOGY TRANSFER TOTAL CAPITAL STOCK TOTAL FACTOR PRODUCTIVITY TOTAL WAGE TRADE BARRIERS TRADE FLOWS TRADE LIBERALIZATION TRADE LIBERALIZATION INCREASES TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE PROTECTION TRADE REFORM TRADE REFORMS TRADE REGIME VALUE ADDED VOLATILITY WAGE BILL WAGE RATE WAGES WEALTH WHOLESALE PRICE WHOLESALE PRICE INDEX WORKER Mitra, Devashish Ural, Beyza P. Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy |
| geographic_facet |
South Asia India |
| relation |
Policy Research Working Paper; No. 4233 |
| description |
This paper investigates the determinants
of productivity in Indian manufacturing industries during
the period 1988-2000. Using two-digit industry level data
for the Indian states, we find evidence of imperfect
interindustry and interstate labor mobility as well as
misallocation of resources across industries and states.
Trade liberalization increases productivity in all
industries across all states, and productivity is higher in
the less protected industries. These effects of protection
and trade liberalization are more pronounced in states that
have relatively more flexible labor markets. Similar effects
are also found in the case of employment, capital stock and
investment. Furthermore, labor market flexibility,
independent of other policies, has a positive effect on
productivity. Importantly, per capita state development
expenditure seems to be the strongest and the most robust
predictor of productivity, employment, capital stock and
investment. Industrial delicensing increases both labor
productivity and employment but only in the states with
flexible labor market institutions. Even after controlling
for delicensing, the analysis shows that trade
liberalization has a productivity-enhancing effect. Finally,
trade liberalization benefits most the export-oriented
industries located in states with flexible labor-market institutions. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Mitra, Devashish Ural, Beyza P. |
| author_facet |
Mitra, Devashish Ural, Beyza P. |
| author_sort |
Mitra, Devashish |
| title |
Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy |
| title_short |
Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy |
| title_full |
Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy |
| title_fullStr |
Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy |
| title_full_unstemmed |
Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy |
| title_sort |
indian manufacturing : a slow sector in a rapidly growing economy |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/05/7611962/indian-manufacturing-slow-sector-rapidly-growing-economy http://hdl.handle.net/10986/7112 |
| _version_ |
1764401926893469696 |
| spelling |
okr-10986-71122021-04-23T14:02:33Z Indian Manufacturing : A Slow Sector in a Rapidly Growing Economy Mitra, Devashish Ural, Beyza P. ADVERSE IMPACT AGGREGATE LEVEL BILATERAL TRADE BOOK VALUE BUREAUCRATIC QUALITY CAPITAL ACCUMULATION CAPITAL GOODS CAPITAL STOCK CENTRAL PLANNING COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS CONTRACT LABOR CURRENCY DEBT DEFLATORS DEMAND CURVE DEMOCRATIC PROCESSES DEREGULATION DEVALUATION DISMISSAL DIVISION OF LABOR ECONOMIC AGENTS ECONOMIC ENVIRONMENT ECONOMIC GROWTH ECONOMIC INSTITUTIONS ECONOMIC PERFORMANCE ECONOMIES OF SCALE ELASTICITY EMPLOYEE EMPLOYMENT EMPLOYMENT PERFORMANCE ENTRY BARRIER EXPENDITURE EXPENDITURES EXPORT INCENTIVES EXPORT MARKETS EXPORT-ORIENTED INDUSTRIES EXPORTS FACTOR RETURNS FAIR FINAL GOODS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE GDP GOVERNMENT EXPENDITURE GROSS OUTPUT GROWTH LITERATURE GROWTH MODELS GROWTH RATE GROWTH REGRESSIONS HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE REFORMS IMPORT PENETRATION INCOME INCOME LEVELS INCREASE IN LABOR INDUSTRIAL POLICY INFLATION INTERMEDIATE INPUTS INTERNATIONAL TRADE JOB SECURITY LABOR CONTRACTS LABOR DEMAND LABOR DEMAND ELASTICITY LABOR LAWS LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKETS LABOR MOBILITY LABOR PRODUCTIVITY LABOR REALLOCATION LABOR REGULATIONS LAYOFF LEVELS OF OUTPUT LICENSING RESTRICTIONS MACROECONOMIC CRISIS MANUFACTURING INDUSTRIES MARKET CONDITIONS MARKET IMPERFECTIONS MARKET RESTRICTIONS MARKET SIZE MONOPOLIES MONOPOLY MORAL HAZARD ON-THE-JOB TRAINING OPENNESS PER CAPITA INCOME PERMANENT WORKERS POSITIVE EFFECTS PRICES OF OUTPUT PRIMARY SOURCE PRIVATE FIRMS PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTION WORKERS PRODUCTIVE FIRMS PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY GROWTH RATES PRODUCTIVITY LEVEL PRODUCTIVITY LEVELS PROPERTY RIGHTS PROTECTED INDUSTRIES QUANTITATIVE RESTRICTIONS RATES OF PROTECTION REAL EXCHANGE RATE REDUCTION IN TARIFFS RELATIVE PRICES RIGID LABOR MARKET RIGID LABOR MARKETS SEVERANCE PAYMENTS SKILLED WORKERS SPECIALIZATION STOCKS SUBSTITUTES TARIFF BARRIERS TARIFF LEVELS TARIFF RATE TARIFF RATES TECHNOLOGY TRANSFER TOTAL CAPITAL STOCK TOTAL FACTOR PRODUCTIVITY TOTAL WAGE TRADE BARRIERS TRADE FLOWS TRADE LIBERALIZATION TRADE LIBERALIZATION INCREASES TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE PROTECTION TRADE REFORM TRADE REFORMS TRADE REGIME VALUE ADDED VOLATILITY WAGE BILL WAGE RATE WAGES WEALTH WHOLESALE PRICE WHOLESALE PRICE INDEX WORKER This paper investigates the determinants of productivity in Indian manufacturing industries during the period 1988-2000. Using two-digit industry level data for the Indian states, we find evidence of imperfect interindustry and interstate labor mobility as well as misallocation of resources across industries and states. Trade liberalization increases productivity in all industries across all states, and productivity is higher in the less protected industries. These effects of protection and trade liberalization are more pronounced in states that have relatively more flexible labor markets. Similar effects are also found in the case of employment, capital stock and investment. Furthermore, labor market flexibility, independent of other policies, has a positive effect on productivity. Importantly, per capita state development expenditure seems to be the strongest and the most robust predictor of productivity, employment, capital stock and investment. Industrial delicensing increases both labor productivity and employment but only in the states with flexible labor market institutions. Even after controlling for delicensing, the analysis shows that trade liberalization has a productivity-enhancing effect. Finally, trade liberalization benefits most the export-oriented industries located in states with flexible labor-market institutions. 2012-06-05T15:39:22Z 2012-06-05T15:39:22Z 2007-05 http://documents.worldbank.org/curated/en/2007/05/7611962/indian-manufacturing-slow-sector-rapidly-growing-economy http://hdl.handle.net/10986/7112 English Policy Research Working Paper; No. 4233 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia India |