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International Trade and Manufacturing Employment: Is India following the Footsteps of Asia or Africa?

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  • Kunal Sen

Abstract

The Indian manufacturing sector has rapidly increased its integration with the world economy since the 1991 trade reforms. We examine whether trade integration created or destroyed jobs in the Indian manufacturing sector, and compare India's employment outcomes with four other countries-Bangladesh, Kenya, South Africa, and Vietnam. We find that the impact of international trade on manufacturing employment seems to be similar to those found for the two African countries rather than the two Asian countries, a surprising result for a country with an apparent comparative advantage in labor-intensive manufacturing goods, and a large excess supply of unskilled labor. Copyright © 2009 Blackwell Publishing Ltd.

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  • Kunal Sen, 2009. "International Trade and Manufacturing Employment: Is India following the Footsteps of Asia or Africa?," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 765-777, November.
  • Handle: RePEc:bla:rdevec:v:13:y:2009:i:4:p:765-777
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    References listed on IDEAS

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    1. Greenaway, David & Hine, Robert C. & Wright, Peter, 1999. "An empirical assessment of the impact of trade on employment in the United Kingdom," European Journal of Political Economy, Elsevier, vol. 15(3), pages 485-500, September.
    2. Jagdish N. Bhagwati & T. N. Srinivasan, 1975. "Foreign Trade Regimes and Economic Development: India," NBER Books, National Bureau of Economic Research, Inc, number bhag75-1, April.
    3. Chand, Satish & Sne, Kunal, 2002. "Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing," Review of Development Economics, Wiley Blackwell, vol. 6(1), pages 120-132, February.
    4. Sugata Marjit & Saibal Kar & Hamid Beladi, 2007. "Trade Reform and Informal Wages," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 313-320, May.
    5. Arvind Panagariya, 2007. "Why India Lags Behind China and How It Can Bridge the Gap," The World Economy, Wiley Blackwell, vol. 30(2), pages 229-248, February.
    6. Hine, Robert C & Wright, Peter W, 1998. "Trade with Low Wage Economies, Employment and Productivity in UK Manufacturing," Economic Journal, Royal Economic Society, vol. 108(450), pages 1500-1510, September.
    7. Milner, Chris & Wright, Peter, 1998. "Modelling Labour Market Adjustment to Trade Liberalisation in an Industrialising Economy," Economic Journal, Royal Economic Society, vol. 108(447), pages 509-528, March.
    8. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    9. Rhys Jenkins & Kunal Sen, 2006. "International Trade and Manufacturing Employment in the South: Four Country Case Studies," Oxford Development Studies, Taylor & Francis Journals, vol. 34(3), pages 299-322.
    10. Richard Palmer-Jones & Kunal Sen, 2003. "What has luck got to do with it? A regional analysis of poverty and agricultural growth in rural India," Journal of Development Studies, Taylor & Francis Journals, vol. 40(1), pages 1-31.
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    Cited by:

    1. Ratna Vadra, 2016. "Creeping tiger: India's presence in Africa," African Journal of Economic and Sustainable Development, Inderscience Enterprises Ltd, vol. 5(1), pages 55-65.
    2. Xavier Cirera & Dirk Willenbockel & Rajith W.D. Lakshman, 2014. "Evidence On The Impact Of Tariff Reductions On Employment In Developing Countries: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 449-471, July.
    3. Kaung Myat Ko & Poomthan Rangkakulnuwat & Sasiwimon W. Paweenawat, 2015. "The Effect of International Trade on Labor Demand in ASEAN5," Economics Bulletin, AccessEcon, vol. 35(2), pages 1034-1041.
    4. Baiardi, Donatella & Bianchi, Carluccio & Lorenzini, Eleonora, 2015. "The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis," Journal of Asian Economics, Elsevier, vol. 38(C), pages 14-30.
    5. Alessandrini, Michele & Fattouh, Bassam & Ferrarini, Benno & Scaramozzino, Pasquale, 2011. "Tariff liberalization and trade specialization: Lessons from India," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 499-513.
    6. Karishma Banga, 2017. "Impact of Linking into Global Value Chains on Indian Employment," Working Papers 1701, Council on Economic Policies.

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