IDEAS home Printed from https://ideas.repec.org/p/cbr/cbrwps/wp263.html
   My bibliography  Save this paper

Growth Response to Competitive Shocks: Market Structure Dynamics Under Liberalisation - the Case of India

Author

Listed:
  • Uma S. Kambhampati
  • Paul A. Kattuman

Abstract

Liberalisation transforms market structures through the behavioural responses of incumbent firms and entrants, large firms and small, to enhanced freedom of choice. Change in market share volatility, and change in the effective agility of small and large firms underpin changes in market structure. We analyse these processes for Indian manufacturing industries over the 18-year period from 1980, spanning the domestic liberalisation of 1985 and the more comprehensive reforms of 1991, using a data set of large and medium firms in 83 industries. We find that while market structures themselves appeared to change little, turbulence in market shares, as well as the way growth is related to size responded markedly, differing in direction and magnitude, depending on whether the liberalisation was partial and domestic, or comprehensive. We find that they tended to offset each other, leading to little visible change in market structure itself. We also find that while drivers of market structure traditionally recognised in industrial organisation studies had significant impacts on both components of concentration change, their dynamics are captured very well by a parsimonious model that has just the announcement effects - the reform dates.

Suggested Citation

  • Uma S. Kambhampati & Paul A. Kattuman, 2003. "Growth Response to Competitive Shocks: Market Structure Dynamics Under Liberalisation - the Case of India," Working Papers wp263, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp263
    Note: PRO-1
    as

    Download full text from publisher

    File URL: https://www.jbs.cam.ac.uk/cbrwp263/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rakesh Basant & Pankaj Chandra, 2002. "Building Technological Capabilities In A Liberalising Developing Economy: Firm Strategies And Public Policy," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(4-5), pages 399-421.
    2. Little, I. M. D., 1996. "India's economic reforms 1991-1996," Journal of Asian Economics, Elsevier, vol. 7(2), pages 161-176.
    3. Joshi, Vijay & Little, I. M. D, 1996. "India's Economic Reforms, 1991-2001," OUP Catalogue, Oxford University Press, number 9780198290780.
    4. S. W. Davies & Paul A. Geroski, 2000. "Changes In Concentration, Turbulence, And The Dynamics Of Market Shares," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 383-391, August.
    5. Pankaj Ghemawat & Tarun Khanna, 1998. "The Nature of Diversified Business Groups: A Research Design and Two Case Studies," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 35-61, March.
    6. Patibandla, Murali, 1998. "Structure, organizational behavior, and technical efficiency: The case of an Indian industry," Journal of Economic Behavior & Organization, Elsevier, vol. 34(3), pages 419-434, March.
    7. Rakesh Basant & Pankaj Chandra, 2002. "Building technological capabilities in a liberalising developing economy: Firm strategies and public policy," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(6), pages 1-23.
    8. Kumar, Nagesh, 1990. "Mobility Barriers and Profitability of Multinational and Local Enterprises in Indian Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 449-463, June.
    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. Shibasaki, Ryuichi & Yonemoto, Kiyoshi & Watanabe, Tomihiro, 2008. "On the effects of trade liberalization policies on regional economies based on "Transnational Interregional Input-Output Table between China and Japan"," Conference papers 331790, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Alokesh Barua & Debashis Chakraborty & Hariprasad CG, 2012. "Entry, Competitiveness and Exports: Evidence from the Indian Firm Data," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 325-347, September.

    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. 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.
    2. Spanos, Yiannis E. & Voudouris, Irini, 2009. "Antecedents and trajectories of AMT adoption: The case of Greek manufacturing SMEs," Research Policy, Elsevier, vol. 38(1), pages 144-155, February.
    3. Kumar, Rajesh & Agarwala, Arun, 2016. "Renewable energy technology diffusion model for techno-economics feasibility," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1515-1524.
    4. Basant, Rakesh, 2002. "Knowledge Flows and IndustrialClusters: An Analytical Review of Literature," IIMA Working Papers WP2002-02-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    5. Meeta Dasgupta & R.K. Gupta & A. Sahay, 2011. "Linking Technological Innovation, Technology Strategy and Organizational Factors," Global Business Review, International Management Institute, vol. 12(2), pages 257-277, June.
    6. Tin Htoo NAING & Yap Su FEI, 2015. "Multinationals, Technology and Regional Linkages in Myanmar's Clothing Industry," Working Papers DP-2015-14, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Basant, Rakesh, 2017. "Exploring Linkages between Innovation and public policy- challenges and Opportunities," IIMA Working Papers WP 2017-11-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. Elvira del Rosario Velarde López & Ma. Zóchitl Araiza Garza & Eunice Saraí Coronado Rojas, 2012. "Factors of the firm and the entrepreneur associated with technological capabilities of some metalworking SMEs in Mexico," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 37(33), pages 85-106, January-J.
    9. Basant, Rakesh, 2003. "US-India Technology Co-operation and Capability Building: The Role of Inter-firm Alliances in Knowledge Based Industries," IIMA Working Papers WP2003-02-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    10. Saripalle, Madhuri, 2006. "Learning across policy regimes: The impact of protection vis-à-vis competition in the Indian automotive industry," MPRA Paper 1701, University Library of Munich, Germany.
    11. Rakesh Basant, 2018. "Exploring Linkages between Industrial Innovation and Public Policy: Challenges and Opportunities," Vikalpa: The Journal for Decision Makers, , vol. 43(2), pages 61-76, June.
    12. Rakesh Basant, 2003. "U.S.-India Technology Cooperation and Capability Building: The Role of Inter-Firm Alliances in Knowledge-Based Industries," Economics Study Area Working Papers 53, East-West Center, Economics Study Area.
    13. Dixit, M. R. & Karna, Amit & Sharma, Sunil, 2007. "A Conceptual Note on Classification of Literature on Capabilities," IIMA Working Papers WP2007-10-05, Indian Institute of Management Ahmedabad, Research and Publication Department.
    14. Rakesh Basant, 2002. "Knowledge Flows and Industrial Clusters: An Analytical Review of Literature," Economics Study Area Working Papers 40, East-West Center, Economics Study Area.
    15. Elvira Velarde Lopez & Edna de la Garza Martinez & Eunice Coronado Rojas, 2012. "The Development Of Technological Capabilities And The Linkage With Educational And Government Institutions In The Small And Medium Enterprises Of The Metalworking Industry In The Central Region Of The," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 5(2), pages 43-56.
    16. Basant, Rakesh & Chandra, Pankaj & Upadhyayula, Rajesh, 2011. "Knowledge Flows and Capability Building in the Indian IT Sector: A Comparative Analysis of Cluster and Non-Cluster Locations," IIMA Working Papers WP2011-10-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
    17. Aeron, Prageet & Jain, Rekha, 2011. "An Exploration into Technological Capabilities among early stage Indian product based Telecom start-ups," IIMA Working Papers WP2011-02-06, Indian Institute of Management Ahmedabad, Research and Publication Department.
    18. Swati Mehta, 2014. "Strategies of Technology Accumulation by Indian Pharmaceutical Firms: A Multinomial Logit Analysis," Millennial Asia, , vol. 5(1), pages 67-87, April.
    19. Chang-Yang Lee & Ji-Hwan Lee & Ajai S. Gaur, 2017. "Are large business groups conducive to industry innovation? The moderating role of technological appropriability," Asia Pacific Journal of Management, Springer, vol. 34(2), pages 313-337, June.
    20. Nilanjan Banik & John Gilbert, 2010. "Regional Integration and Trade Costs in South Asia," Chapters, in: Douglas H. Brooks & Susan F. Stone (ed.), Trade Facilitation and Regional Cooperation in Asia, chapter 4, Edward Elgar Publishing.

    More about this item

    Keywords

    Liberalisation; Competitive Shocks; Firm growth; Turbulence; Market structure; India;
    All these keywords.

    JEL classification:

    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cbr:cbrwps:wp263. 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: Ruth Newman (email available below). General contact details of provider: http://www.jbs.cam.ac.uk .

    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.