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Trade, Technology and Wage Effects of the Economic Policy Reforms on the Indian Private Corporate Sector

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  • Kapur Deepak
  • Dholakia, Ravindra H.

Abstract

The economic growth achieved in India after 1991 bears an imprint of the economic policy reforms which were accelerated in 1991 with a shift in development strategy towards increasing liberalisation and globalisation of Indian economy. The present paper examines various hypotheses regarding trade, technology and wage effects of the economic policy reforms on the Indian private corporate sector. The analysis has been carried out using detailed annual financial statements of 563 non-government non-financial public limited companies for which a continuous time series data was obtained from 1980-81 to 1995-96. It has been found that not only is there a substantial increase in the number of companies engaged in export activity but there is also an increase in export intensity of the companies after the reforms. It is also seen that both the overall import intensity and raw material import intensity are higher on an average for the exporting firms than for the non-exporting firms after 1991. Technology related expenditure showed greater increase in the exporting firms which is consistent with the neo-technology theories of international trade. It was also found that for exporting firms there was a greater decrease in the salary/wage related expenditure whereas for non-exporting firms the decrease was more for employee welfare related expenditure though both salary/wage expenditure and welfare expenses have decreased for both exporting and non-exporting firms since 1980-81. It is also argued that the real wage bill in the exporting companies increased by a substantially higher rate than in the non-exporting companies. This could be on account of increase in employment or real wage rate or both.

Suggested Citation

  • Kapur Deepak & Dholakia, Ravindra H., 1999. "Trade, Technology and Wage Effects of the Economic Policy Reforms on the Indian Private Corporate Sector," IIMA Working Papers WP1999-10-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:wp01627
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    Cited by:

    1. Mukherjee, Sanchita, 2009. "Technology intensity of Indian merchandise exports," MPRA Paper 35694, University Library of Munich, Germany.
    2. Abraham, Vinoj & Sasikumar, S.K., 2010. "Labour Cost and Export Behaviour of Firms in Indian Textile and Clothing Industry," MPRA Paper 22784, University Library of Munich, Germany.
    3. Correa, Paulo & Dayoub, Mariam & Francisco, Manuela, 2007. "Identifying supply-side constraints to export performance in Ecuador : an exercise with Investment Climate Survey data," Policy Research Working Paper Series 4179, The World Bank.
    4. Dholakia, Ravindra H. & Kapur Deepak, 2004. "Determinants of Export Performance of Indian Firms – A Strategic Perspective," IIMA Working Papers WP2004-08-01, Indian Institute of Management Ahmedabad, Research and Publication Department.

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