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Productivity Trends in India's Manufacturing Sectors in the Last Two Decades

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  • Bulent Unel

Abstract

Starting in the late 1970s, the Indian authorities implemented a series of reforms aimed at exposing the economy to greater competition and at liberalizing key aspects of economic activity. This paper investigates productivity trends in India''s (registered) manufacturing sectors during the 1980s and 1990s. The main findings of the paper are (i) labor and total factor productivity (TFP) growth in total manufacturing and many of the component sectors since 1980 were markedly higher than that in the preceding two decades, although the extent of the acceleration in TFP growth depends critically on the underlying assumptions about factor elasticities and the assumed structure of the production function; (ii) productivity growth for total manufacturing as well as for many subsectors picked up further after the 1991 reforms; and (iii) classification of the best performing sectors and the weakest performing sectors, based on comparative TFP, remains robust to changes in underlying assumptions.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/22.

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Length: 25
Date of creation: 01 Jan 2003
Date of revision:
Handle: RePEc:imf:imfwpa:03/22

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Related research

Keywords: Labor productivity; Manufacturing; growth rates; labor shares; growth rate; capital formation; fixed capital formation; growth accounting; labor productivity growth; economic growth; gross fixed capital formation; total factor productivity; labor compensation; national income; sectoral growth rates; national income statistics; gdp growth; gdp growth rate; labour;

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  1. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 84(4), pages 655-76, August.
  2. Roeger, Werner, 1995. "Can Imperfect Competition Explain the Difference between Primal and Dual Productivity Measures? Estimates for U.S. Manufacturing," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(2), pages 316-30, April.
  3. Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 641-80, August.
  4. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, American Economic Association, vol. 86(5), pages 1216-38, December.
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