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Did Liberalization Impact Productivity of the Indian Electronics Hardware Industry?


  • Rumki Majumdar


In this paper, we analyse the trends in productivity, both partial and total, in the four sectors of the Indian electronics hardware industry after liberalization. Using an innovative combination of two established but independent methodologies, we estimate the contributions of technical efficiency change and technological progress to total factor productivity growth (TFPG) and thereby to output growth. Contrary to expectations, we found that none of the four sectors in the industry achieved impressive growth in capital productivity and TFPG despite the new economic reforms. The firms emphasised technological progress at the cost of technical efficiency change but failed to sustain TFPG as the liberalization of policies intensified further. Surprisingly the firms' effort to employ skilled labour, larger scales of production and their strategy to improve production technology through R&D and/or imports did not benefit productivity substantially. In a comparative study with China, we found that the Indian electronics hardware industry did not perform as well as that of China due to the persistent rigid and bureaucratic procedures, labour market inefficiencies and inadequate infrastructure, among others.

Suggested Citation

  • Rumki Majumdar, 2010. "Did Liberalization Impact Productivity of the Indian Electronics Hardware Industry?," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 17(2), pages 253-273.
  • Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:253-273
    DOI: 10.1080/13571516.2010.483093

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    Cited by:

    1. Bilal Rafi, 2015. "The Employment and Occupational Outcomes of Indian Male Migrants in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 18(1), pages 113-129.
    2. Phil Lewis & Bilal Rafi, 2014. "Earnings of Indian Male Migrants in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 17(3), pages 257-275.
    3. Mamatzakis, E. & Tsionas, M., 2018. "Revisiting the returns of public infrastructure in Mexico: A limited information local likelihood estimation," Economic Modelling, Elsevier, vol. 75(C), pages 132-141.


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