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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.

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  • 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
    DOI: 10.1111/j.1468-0335.2007.00616.x
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    1. Mr. Bulent Unel, 2003. "Productivity Trends in India's Manufacturing Sectors in the Last Two Decades," IMF Working Papers 2003/022, International Monetary Fund.
    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. Arvind Panagariya, 2004. "India in the 1980s and 1990s: A Triumph of Reforms:," International Trade 0403005, University Library of Munich, Germany.
    5. 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.
    6. Mr. Arvind Panagariya, 2004. "India in the 1980's and 1990's: A Triumph of Reforms," IMF Working Papers 2004/043, International Monetary Fund.
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    2. Arpita Ghose & Chandrima Chakraborti, 2013. "The Relative Role of Imports and Exports in Explaining Productivity of Indian Bio-Pharmaceutical Firms: Evidence from Non Parametric Data Envelopment Analysis," Foreign Trade Review, , vol. 48(2), pages 165-201, May.

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