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From Licence Raj to Market Forces: The Determinants of Industrial Structure in India after Reform

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  • KWOK TONG SOO

Abstract

This paper explores the relationship between factor endowments, technology and industrial structure, using a panel data‐set of Indian industries across states, industries and time. Factor endowments and technology are found to be significantly related to industry shares, and this is robust to controlling for the slow adjustment of industrial structure. I also consider the impact of the liberalization of the Indian economy beginning in 1985 and 1991 on the relationship between these variables. While industrial structure is always positively related to technological advantage, factor endowments play an increasingly significant role after liberalization.

Suggested Citation

  • Kwok Tong Soo, 2008. "From Licence Raj to Market Forces: The Determinants of Industrial Structure in India after Reform," Economica, London School of Economics and Political Science, vol. 75(298), pages 222-243, May.
  • Handle: RePEc:bla:econom:v:75:y:2008:i:298:p:222-243
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    File URL: https://doi.org/10.1111/j.1468-0335.2007.00616.x
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    References listed on IDEAS

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    1. Kaivan Munshi & Mark R. Rosenzweig, 2005. "Why is Mobility in India so Low? Social Insurance, Inequality, and Growth," CID Working Papers 121, Center for International Development at Harvard University.
    2. James Harrigan & Egon Zakrajsek, 2000. "Factor Supplies and Specialization in the World Economy," NBER Working Papers 7848, National Bureau of Economic Research, Inc.
    3. Dani Rodrik & Arvind Subramanian, 2005. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 193-228, September.
    4. Bulent Unel, 2003. "Productivity Trends in India's Manufacturing Sectors in the Last Two Decades," IMF Working Papers 03/22, International Monetary Fund.
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    Cited by:

    1. Ravi Sarathy & Elitsa R. Banalieva, 2014. "Economic Development And Marketing Strategies: A Comparative Lens," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 5(1).

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