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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 whether the effects on registered manufacturing output of dismantling the License Raj – a system of central controls regulating entry and production activity in this sector – vary across Indian states with different labor market regulations. The effects are found to be unequal across Indian states with different labor market regulations. In particular, following delicensing, industries located in states with proemployer labor market institutions grew more quickly than those in proworker environments.

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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number iewwp345.

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Date of creation: Dec 2007
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Handle: RePEc:zur:iewwpx:345

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Related research
Keywords: Distance to frontier; India; Industrial policy; Financial development; Labor regulation; Liberalization; Manufacturing; Reform.;

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Find related papers by JEL classification:
J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
P41 - Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform

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Full references

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. Poonam Gupta, 2008. "What Constrains Indian Manufacturing," Working Papers id:1597, esocialsciences.com. [Downloadable!]
    Other versions:
  2. Natalie Chen & Jean Imbs & Andrew Scott, 2006. "The dynamics of trade and competition," Research series 200610-3, National Bank of Belgium. [Downloadable!]
    Other versions:
  3. Susanne Prantl & Alexandra Spitz-Oener, 2009. "How does entry regulation influence entry into selfemployment and occupational mobility?," Discussion Papers 267, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
    Other versions:
  4. Runli Xie, 2009. "Trade-Off Between Consumption Growth and Inequality: Theory and Evidence for Germany," SFB 649 Discussion Papers SFB649DP2009-034, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
  5. Eric Edmonds, 2007. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," Working Papers id:999, esocialsciences.com. [Downloadable!]
  6. 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!]
    Other versions:
  7. 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!]
  8. Pinelopi K. Goldberg & Amit Khandelwal & Nina Pavcnik & Petia Topalova, 2008. "Multi-product Firms and Product Turnover in the Developing World: Evidence from India," NBER Working Papers 14127, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Philippe Aghion, 2009. "Some Thoughts on Industrial Policy and Growth," Documents de Travail de l'OFCE 2009-09, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  10. Basu, Kaushik & Maertens, Annemie, 2007. "The Pattern and Causes of Economic Growth in India," Working Papers 07-08, Cornell University, Center for Analytic Economics. [Downloadable!]
    Other versions:
  11. Mathias Hoffmann & Thomas Nitschka, 2009. "Securitization of Mortgage Debt, Asset Prices and International Risk Sharing," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  12. Gupta, Poonam & Hasan, Rana & Kumar, Utsav, 2009. "Big Reforms but Small Payoffs: Explaining the Weak Record of Growth and Employment in Indian Manufacturing," MPRA Paper 13496, University Library of Munich, Germany. [Downloadable!]
  13. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June. [Downloadable!] (restricted)
  14. Amartya Lahiri & Kei-Mu Yi, 2009. "A Tale of Two States: Maharashtra and West Bengal," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(3), pages 523-542, July. [Downloadable!] (restricted)
    Other versions:
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