Trade liberalisation, market power abd scale efficiency in Indian industry
AbstractUsing information on listed firms in each of the industry groups atthe two-digit level within Manufacturing this study investigates whetherthe radical shift in trade policy in India in 1991 resulted in a reductionin market power and/or an improvement in scale efficiency. We estimatea group-wise production function allowing for firm-specific effects. Aplausible estimate of market power is obtained and the assumption ofconstant returns to scale is mostly rejected. As regards the effects of thetrade-policy shock of 1991, evidence of a move to a more competitivemarket structure or of an improvement in scale efficiency is notwidespread across Indian manufacturing.
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Bibliographic InfoPaper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 336.
Length: 44 pages
Date of creation: Aug 2002
Date of revision:
Trade liberalisation; Market power; Scale Economies;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
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