Trade Liberalisation, Market Power abd Scale Efficiency in Indian Industry
AbstractUsing information on listed firms in each of the industry groups at the two-digit level within Manufacturing this study investigates whether the radical shift in trade policy in India in 1991 resulted in a reduction in market power and/or an improvement in scale efficiency. They estimate a group-wise production function allowing for firm-specific effects. A plausible estimate of market power is obtained and the assumption of constant returns to scale is mostly rejected. As regards the effects of the trade-policy shock of 1991, evidence of a move to a more competitive market structure or of an improvement in scale efficiency is not widespread across Indian manufacturing. [Working Paper No. 336]
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Trade liberalisation; Market power; Scale Economies;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-20 (All new papers)
- NEP-COM-2010-11-20 (Industrial Competition)
- NEP-EFF-2010-11-20 (Efficiency & Productivity)
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