Are reforms productive? Explaining productivity and efficiency in the Indian manufacturing
AbstractIndia’s economic liberalization in the 1990s provides scope for research on the effect of policy reforms on economic performance. This paper addresses the question of some of these policy changes and their impact on firms’ productivity and efficiency. We test specifically the role of export, import (total, intermediary and capital goods), R&D, technology transfer and infrastructure endowment over the period 1994-2008. Result of the analysis suggests that infrastructure is a crucial determinant of manufacturing performance in India. This is true for a wide range of variables such as transport, energy and information & communication technology (ICT). This result is important in the Indian context of infrastructure bottlenecks. Empirical results also suggest that knowledge transfers through exports are more important than through imports. Other findings indicate that R&D is not a productivity-enhancing activity in India and that firms rely more on purchase of foreign technology. This outcome does not come as a surprise because Indian firms are known for low in-house research and innovation-oriented activities.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 201233.
Date of creation: 2012
Date of revision:
Find related papers by JEL classification:
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-EFF-2012-09-22 (Efficiency & Productivity)
- NEP-INO-2012-09-22 (Innovation)
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