IDEAS home Printed from https://ideas.repec.org/a/taf/oxdevs/v30y2002i3p317-331.html
   My bibliography  Save this article

Trade Policy, Equipment Investment and Growth in India

Author

Listed:
  • Kunal Sen

Abstract

The relationship between trade policy and economic performance is one of the oldest controversies in economic development. In this paper, we examine an alternative mechanism through which trade reforms may impact on economic growth to those commonly discussed in the literature. This mechanism builds on the link between equipment investment and growth that has been observed in cross-country data. We argue that that in countries which have had highly restrictive trade policies with respect to capital goods, liberalization measures that specifically target capital goods imports may bring about a fall in the relative price of capital goods, leading to an increase in the rate of investment in equipment. Quantifying the link between trade policy, equipment investment and economic growth in the Indian case, we find strong support for this mechanism.

Suggested Citation

  • Kunal Sen, 2002. "Trade Policy, Equipment Investment and Growth in India," Oxford Development Studies, Taylor & Francis Journals, vol. 30(3), pages 317-331.
    • Handle: RePEc:taf:oxdevs:v:30:y:2002:i:3:p:317-331
    DOI: 10.1080/1360081022000012725
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/1360081022000012725
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1360081022000012725?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sushanta Mallick & Tomoe Moore, 2008. "Foreign Capital in a Growth Model," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 143-159, February.
    2. Hrushikesh Mallick & Shashi Agarwal, 2007. "Impact Of Real Interest Rates On Real Output Growth In India: A Long-Run Analysis In A Liberalized Financial Regime," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 52(02), pages 215-231.
    3. Weicheng Lian & Natalija Novta & Evgenia Pugacheva & Yannick Timmer & Petia Topalova, 2020. "The Price of Capital Goods: A Driver of Investment Under Threat," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 68(3), pages 509-549, September.
    4. Weicheng Lian & Natalija Novta & Evgenia Pugacheva & Yannick Timmer & Petia Topalova, 0. "The Price of Capital Goods: A Driver of Investment Under Threat," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 0, pages 1-41.
    5. Pradeep Agrawal & Sahoo Pravakar & Ranjan Kumar Dash, 2010. "Savings Behavior In India: Co-Integration And Causality Evidence," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(02), pages 273-295.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. André Sapir & Christopher Stevens, 1987. "India's Exports of Manufactures to the European Community: Recent Performance and Constraints," Development Policy Review, Overseas Development Institute, vol. 5(4), pages 379-398, December.
    2. Siddiqur Osmani, 2009. "Explaining Growth in South Asia," Chapters, in: Gary McMahon & Hadi Salehi Esfahani & Lyn Squire (ed.), Diversity in Economic Growth, chapter 3, Edward Elgar Publishing.
    3. Manmohan Agarwal & John Whalley, 2013. "The 1991 Reforms, Indian Economic Growth, and Social Progress," NBER Working Papers 19024, National Bureau of Economic Research, Inc.
    4. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    5. Abhijit Sharma & Theodore Panagiotidis, 2003. "An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001)," Working Papers 2003004, The University of Sheffield, Department of Economics, revised Nov 2003.
    6. Singh, Nirvikar, 2008. "India’s Development Strategy: Accidents, Design and Replicability," MPRA Paper 12453, University Library of Munich, Germany.
    7. Monojit Chatterji & Homagni Choudhury, 2010. "The Changing Inter-Industry Wage Structure of the Organised Manufacturing Sector in India, 1973-74 to 2003-04," Dundee Discussion Papers in Economics 244, Economic Studies, University of Dundee.
    8. Vijay Joshi & Ian M. D. Little, 1989. "Les politiques macro-économiques indiennes," Revue Tiers Monde, Programme National Persée, vol. 30(120), pages 797-821.
    9. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    10. Khatkhate, Deena R., 1997. "India's economic growth: A conundrum," World Development, Elsevier, vol. 25(9), pages 1551-1559, September.
    11. Sinha Roy, Saikat, 2007. "Demand and Supply Factors in the Determination of India's Disaggregated Manufactured Exports: A Simultaneous Error-Correction Aprroach," MPRA Paper 68589, University Library of Munich, Germany.
    12. Denis Kessler & Dominique Strauss-Kahn, 1984. "Existe-t-il un lien entre l'épargne intérieure et l'afflux de capitaux extérieurs ?," Revue Tiers Monde, Programme National Persée, vol. 25(98), pages 269-297.
    13. Shoumitro Chatterjee & Arvind Subramanian, 2023. "India’s inward (re)turn: is it warranted? Will it work?," Indian Economic Review, Springer, vol. 58(1), pages 35-59, July.
    14. Arvind Virmani, 2010. "India's 1990-91 Crisis: Reforms, Myths and Paradoxes," Working Papers id:3078, eSocialSciences.
    15. M. Macauley & M. Naimuddin & P.C. Agarwal & J. Dunkerley, 1989. "Fuelwood Use in Urban Areas: A Case Study of Raipur, India," The Energy Journal, , vol. 10(3), pages 157-180, July.
    16. Ramachandran, Vijaya, 1995. "Does agriculture really matter? The case of Korea, 1910-1970," Journal of Asian Economics, Elsevier, vol. 6(3), pages 367-384.
    17. T. N. Srinivasan, 2014. "Development Process: A Manual or a Collection of Anecdotes?," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 15(4), pages 418-423, November.
    18. Avigyan Sengupta & Saikat Sinha Roy, 2018. "India’s trade policy: Which way now?," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 45(2), pages 129-145, June.
    19. Selwyn Cornish & Raghbendra Jha, 2017. "Trevor Swan and Indian Planning: The Lessons of 1958/59," History of Economics Review, Taylor & Francis Journals, vol. 67(1), pages 2-25, May.
    20. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oxdevs:v:30:y:2002:i:3:p:317-331. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CODS20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.