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Input usage and productivity in Indian manufacturing plants

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Author Info

  • Ghani, Ejaz
  • Kerr, William R.
  • O'Connell, Stephen D.

Abstract

This paper analyzes the scale and productivity consequences of varied input use in Indian manufacturing using detailed plant-level data. Counts of distinct material inputs are higher in urban settings than in rural locations, unconditionally and conditional on plant size, and they are also higher in the organized sector than in the unorganized sector. At the district level, higher input usage in the organized sector is generally observed in wealthier districts and those with greater literacy rates. If looking within states, the usage is more closely associated with electricity access, population density, and closer spatial proximity to one of India's largest cities. Plants in the organized sector utilizing a greater variety of inputs display higher productivity, with the effects mostly concentrated among smaller plants with fewer than 50 employees. For the unorganized sector, there is little correlation of input counts and local conditions, for better or for worse, and a more modest link to productivity outcomes.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6656.

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Date of creation: 01 Oct 2013
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Handle: RePEc:wbk:wbrwps:6656

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Keywords: Water and Industry; E-Business; Transport Economics Policy&Planning; Economic Theory&Research; Environmental Economics&Policies;

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References

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  1. Antonio Ciccone & Robert E. Hall, 1996. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
  2. Nick Bloom & Ben Eifert & Aprajit Mahajan & David McKenzie & John Roberts, 2010. "Does management matter?: evidence from India," LSE Research Online Documents on Economics 36366, London School of Economics and Political Science, LSE Library.
  3. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
  4. Audretsch, David B & Feldman, Maryann P, 1998. "Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition," CEPR Discussion Papers 1980, C.E.P.R. Discussion Papers.
  5. Gilles Duranton & Diego Puga, 2000. "Nursery cities: urban diversity, process innovation and the life-cycle of products," LSE Research Online Documents on Economics 20204, London School of Economics and Political Science, LSE Library.
  6. Jan De Loecker, 2011. "Product Differentiation, Multiproduct Firms, and Estimating the Impact of Trade Liberalization on Productivity," Econometrica, Econometric Society, vol. 79(5), pages 1407-1451, 09.
  7. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Harvard Business School Working Papers 07-064, Harvard Business School.
  8. Oliver Falck & Christina Guenther & Stephan Heblich & William R. Kerr, 2010. "From Russia with Love: The Impact of Relocated Firms on Incumbent Survival," NBER Working Papers 16141, National Bureau of Economic Research, Inc.
  9. Albert Bollard & Peter Klenow & Gunjam Sharma, 2013. "India's Mysterious Manufacturing Miracle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 59-85, January.
  10. Fernandes, Ana M. & Sharma, Gunjan, 2012. "Together we stand ? agglomeration in Indian manufacturing," Policy Research Working Paper Series 6062, The World Bank.
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Cited by:
  1. Ghani, Ejaz & Kerr, William R. & Tewari, Ishani, 2013. "Specialization, diversity, and Indian manufacturing growth," Policy Research Working Paper Series 6648, The World Bank.

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