IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Policy, economic federalism, and product market entry: the Indian experience

  • S. K. Bhaumik
  • S. Gangopadhyay
  • S. Krishnan

Productivity growth has long been associated with, among other things, contestability of markets which, in turn, is dependent on the ease with which potential competitors to the incumbent firms can enter the product market. There is a growing consensus that in emerging markets regulatory and institutional factors may have a greater influence on a firm's ability to enter a product market than strategic positions adopted by the incumbent firms. We examine this proposition in the context of India where the industrial policies of the 1980s and the 1990s are widely believed to be pro-incumbent and pro-competition, respectively, thereby providing the setting for a natural experiment with 1991 as the watershed year. In our analysis, we also take into consideration the possibility that the greater economic federalism associated with the reforms of the 1990s may have affected the distribution of industrial units across states after 1991. Our paper, which uses the experiences of the textiles and electrical machinery sectors during the two decades as the basis for the analysis, finds broad support for both these hypotheses. La croissance de la productivit� a longtemps �t� associ�e, entre autres, avec la contestabilit� des march�s, qui � son tour d�pend de la facilit� avec laquelle des concurrents potentiels pour les entreprises en place peuvent entrer sur le march�. Il existe un consensus croissant sur le fait que, sur les march�s �mergents, les facteurs institutionnels et r�gulateurs peuvent avoir un meilleur impact sur la capacit� des entreprises � p�n�trer un march� que des strat�gies adopt�es � cet effet par les entreprises en place. Cette hypoth�se est examin�e dans le cas de l'Inde, o� il est commun�ment admis que les politiques industrielles des ann�es 1980 avaient �t� favorables aux entreprises en place alors que celles des ann�es 1990 se montr�rent plus ouvertes � la concurrence; cela fournit ainsi le cadre d'une exp�rience naturelle o� 1991 est consid�r� comme l'ann�e charni�re. Notre analyse consid�re �galement que le f�d�ralisme �conomique plus important associ� aux r�formes des ann�es 1990 pourrait avoir affect� la r�partition g�ographique des activit�s industrielles entre les diff�rents Etats. Notre article, en s'appuyant sur les cas des secteurs du textile et des �quipements �lectriques au cours des deux d�cennies, fournit des arguments en faveur de ces deux hypoth�ses.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/09578810701853124&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Taylor and Francis Journals in its journal The European Journal of Development Research.

Volume (Year): 20 (2008)
Issue (Month): 1 ()
Pages: 1-30

as
in new window

Handle: RePEc:taf:eurjdr:v:20:y:2008:i:1:p:1-30
Contact details of provider: Web page: http://www.tandfonline.com/FEDR20

Order Information: Web: http://www.tandfonline.com/pricing/journal/FEDR20

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:taf:eurjdr:v:20:y:2008:i:1:p:1-30. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.