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Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing

Author

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  • Chand, Satish
  • Sne, Kunal

Abstract

The impact of trade liberalization on productivity growth is still an empirical issue; the theoretical literature is as yet unclear on the direction of any such association. This paper develops an analytical framework and employs it to empirically test whether trade liberalization in Indian manufacturing has raised total factor productivity (TFP) growth. The answer is in the affirmative. The results also support a key postulate of the new growth theories, that liberalization of the intermediate-good sectors has a larger favorable impact on TFP growth than that of the final-good sectors. Copyright 2002 by Blackwell Publishing Ltd

Suggested Citation

  • 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.
    • Handle: RePEc:bla:rdevec:v:6:y:2002:i:1:p:120-32
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    Cited by:

    1. Arvind Panagariya, 2004. "India in the 1980s and 1990s: A Triumph of Reforms:," International Trade 0403005, University Library of Munich, Germany.
    2. Geoffrey N. Keim & Beth Anne Wilson, 2007. "India's future: it's about jobs," International Finance Discussion Papers 913, Board of Governors of the Federal Reserve System (U.S.).
    3. Mukherjee, Subhadip & Chanda, Rupa, 2017. "Differential effects of trade openness on Indian manufacturing firms," Economic Modelling, Elsevier, vol. 61(C), pages 273-292.
    4. Marie-Ange Véganzonès-Varoudakis & Arup Mitra & Chandan Sharma, 2012. "Are Reforms Productive? Explaining Productivity and Efficiency in the Indian Manufacturing," Post-Print hal-03058727, HAL.
    5. Deb Kusum Das, 2007. "Trade Liberalization and Industrial Productivity: An Assessment of Developing Country Experiences," Working Papers id:1009, eSocialSciences.
    6. Anthony Enisan Akinlo, 2005. "Impact of Macroeconomic Factors on Total Factor Productivity in Sub-Saharan African Countries," WIDER Working Paper Series RP2005-39, World Institute for Development Economic Research (UNU-WIDER).
    7. Kambhampati, Uma S. & Kattuman, Paul A., 2009. "Growth responses to competitive shocks: Market structure dynamics under liberalisation," Structural Change and Economic Dynamics, Elsevier, vol. 20(2), pages 114-125, June.
    8. Bhaskara Rao & Maheshwar Rao, 2005. "Determinants Of Growth Rate: Some Methodological Issues With Data From Fiji," Macroeconomics 0509003, University Library of Munich, Germany.
    9. Ohlan, Ramphul, 2013. "Efficiency and Total Factor Productivity Growth in Indian Dairy Sector," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(1), pages 1-27, February.
    10. 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.
    11. Singh, Nirvikar, 2006. "Services-led industrialization in India: Assessment and lessons," MPRA Paper 1276, University Library of Munich, Germany.
    12. Singh, Nirvikar, 2008. "India’s Development Strategy: Accidents, Design and Replicability," MPRA Paper 12453, University Library of Munich, Germany.
    13. Takam Fongang, Guy Martial & Kamdem, Cyrille Bergaly & Litchepah Tambo, Christian, 2017. "Does trade openness affect manufacturing growth in EMCCA countries? A panel cointegration analysis," MPRA Paper 83747, University Library of Munich, Germany.
    14. Arvind Panagariya, 2003. "India in the 1980s: Weak Reforms, Fragile Growth," International Trade 0309010, University Library of Munich, Germany.
    15. S K Mishra, 2007. "Globalization and Structural Changes in the Indian Industrial Sector: An Analysis of Production Functions," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(4), pages 56-81, November.
    16. Bhaumik, Sumon Kumar & Gangopadhyay, Shubhashis & Krishnan, Shagun, 2007. "Entry, reforms, complementarity and performance: A tale of two Indian manufacturing sectors," Economic Systems, Elsevier, vol. 31(4), pages 375-390, December.
    17. Brigitte Granville, 2006. "Integrating poverty reduction in IMF-World Bank Models," Working Papers id:502, eSocialSciences.
    18. Ghosh, Saibal, 2013. "Do economic reforms matter for manufacturing productivity? Evidence from the Indian experience," Economic Modelling, Elsevier, vol. 31(C), pages 723-733.
    19. Bhaumik, Sumon K. & Kumbhakar, Subal C., 2008. "Impact of Reforms on Plant-Level Productivity and Technical Efficiency: Evidence from the Indian Manufacturing Sector," IZA Discussion Papers 3347, Institute of Labor Economics (IZA).
    20. Kathuria, Vinish & Seethamma Natarajan, Rajesh Raj & Sen, Kunal, 2010. "State business relations and manufacturing productivity growth in India," MPRA Paper 20314, University Library of Munich, Germany.
    21. Sèna Kimm Gnangnon, 2020. "Aid for Trade and sectoral employment diversification in recipient-countries," Economic Change and Restructuring, Springer, vol. 53(2), pages 265-295, May.
    22. Bhaumik, Sumon Kumar & Kumbhakar, Subal C., 2010. "Is the post-reform growth of the Indian manufacturing sector efficiency driven? Empirical evidence from plant-level data," Journal of Asian Economics, Elsevier, vol. 21(2), pages 219-232, April.
    23. 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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