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The Distribution of Firm Size in India: What Can Survey Data Tell Us?

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Author Info

  • Hasan, Rana

    (Asian Development Bank)

  • L. Jandoc, Karl Robert

    (Asian Development Bank)

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    Abstract

    We use establishment-level data from Indian manufacturing to describe the distribution of firm size in terms of employment, and discuss implications for public policy. A unique feature of our analysis is the use of nationally representative establishment-level data from both the registered (formal) and unregistered (informal) components of the Indian manufacturing sector. We also examine how the distribution of firm size varies across states coded by recent literature as having either flexible or inflexible labor regulations. We find little difference in the size distribution of firms between states believed to have flexible labor regulations versus those with inflexible labor regulations. However, restricting attention to labor-intensive industries, we find a greater prevalence of larger-sized firms in states with flexible labor regulations. This suggests that labor regulations may indeed be affecting firm size adversely. More generally, our paper serves to illustrate the point that establishment-level survey data represent a very rich source for work on public policy issues.

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    Bibliographic Info

    Paper provided by Asian Development Bank in its series ADB Economics Working Paper Series with number 213.

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    Length: 34 pages
    Date of creation: Aug 2010
    Date of revision:
    Handle: RePEc:ris:adbewp:0213

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    Related research

    Keywords: Size Distribution of Firms; Labor Regulations; India;

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    Cited by:
    1. Ghani, Ejaz & Kerr, William R. & O'Connell, Stephen D., 2013. "The exceptional persistence of India's unorganized sector," Policy Research Working Paper Series 6454, The World Bank.
    2. Ejaz Ghani & Grover Goswami & William R. Kerr, 2012. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing," Harvard Business School Working Papers 13-040, Harvard Business School.
    3. Ghani, Ejaz & Kerr, William R. & O'Connell, Stephen D., 2013. "Female business ownership and informal sector persistence," Policy Research Working Paper Series 6612, The World Bank.
    4. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highway to success in India : the impact of the golden quadrilateral project for the location and performance of manufacturing," Policy Research Working Paper Series 6320, The World Bank.
    5. World Bank, 2012. "World Development Report 2013 : Jobs," World Bank Publications, The World Bank, number 11843, October.

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