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Trade Liberalization And Firm-Level Productivity: A Panel Data Analysis Of The Indian Iron–Steel Industry

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  • Sanjay Kumar Mangla

Abstract

The iron–steel industry in India contributes about 3% of gross domestic product and provides employment for more than half a million people. However, although steel production in India has increased at a trend growth rate of 7.83% during the post-reform period between 1991–1992 and 2012–2013, this does not necessarily indicate efficient utilization of production factors, as it can also result from a higher level of inputs. Therefore, it is important to record productivity growth and identify its determinants. This study estimates total factor productivity (from firm-level data) in the Indian iron–steel industry and examines the impact of trade liberalization (measured as decline in input tariffs, output tariffs, and effective protection rate) on productivity during the abovementioned period.

Suggested Citation

  • Sanjay Kumar Mangla, 2018. "Trade Liberalization And Firm-Level Productivity: A Panel Data Analysis Of The Indian Iron–Steel Industry," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(219), pages 7-32, October –.
    • Handle: RePEc:beo:journl:v:63:y:2018:i:219:p:7-32
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    References listed on IDEAS

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    1. Rashmi Banga & B.N.Goldar, 2004. "Contribution of services to output growth and productivity in Indian manufacturing: Pre and post reforms," Indian Council for Research on International Economic Relations, New Delhi Working Papers 139, Indian Council for Research on International Economic Relations, New Delhi, India.
    2. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    3. W. M. Corden, 1966. "The Structure of a Tariff System and the Effective Protective Rate," Journal of Political Economy, University of Chicago Press, vol. 74(3), pages 221-221.
    4. Sarbapriya Ray, 2012. "Productivity Growth in Some Energy Intensive Manufacturing Industries in India: An Analytical Assessment," International Journal of Economics and Financial Issues, Econjournals, vol. 2(1), pages 54-70.
    5. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    6. Petia Topalova & Amit Khandelwal, 2011. "Trade Liberalization and Firm Productivity: The Case of India," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 995-1009, August.
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    Cited by:

    1. Subhrabaran Das & Ariful Hoque, 2023. "Firm-level productivity and its determinants in the Indian pharmaceutical industry," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 50(4), pages 439-459, December.

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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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