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The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India

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Author Info
Philippe Aghion
Robin Burgess
Stephen Redding
Fabrizio Zilibotti

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Abstract

We study the effects of the progressive elimination of the system of industrial regulations on entry and production, known as the "license raj," on registered manufacturing output, employment, entry and investment across Indian states with different labor market regulations. The effects are found to be unequal depending on the institutional environment in which industries are embedded. In particular, following delicensing, industries located in states with pro-employer labor market institutions grew more quickly than those in pro-worker environments.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12031.

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Date of creation: Feb 2006
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Handle: RePEc:nbr:nberwo:12031

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L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Natalie Chen & Jean Imbs & Andrew Scott, 2006. "The dynamics of trade and competition," Research series 200610-3, National Bank of Belgium. [Downloadable!]
  2. Poonam Gupta & Rana Hasan & Utsav Kumar, . "What Constrains Indian Manufacturing?," Indian Council for Research on International Economic Relations, New Delhi Working Papers 211, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  3. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2007. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," IZA Discussion Papers 2611, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Simon Commander & Jan Svejnar, 2007. "Do Institutions, Ownership, Exporting and Competition Explain Firm Performance? Evidence from 26 Transition Countries," IZA Discussion Papers 2637, Institute for the Study of Labor (IZA). [Downloadable!]
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