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Does services liberalization affect manufacturing firms’ export performance? Evidence from India

Author

Listed:
  • Maria Bas

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

Abstract

This paper investigates the relationship between the reform of energy, telecommunications and transport services in India in the mid-1990s and manufacturing firms' export performance. The empirical analysis relies on exogenous indicators of regulation of Indian services sectors and detailed firm-level data from India in the 1994–2004 period. I find that the reform of upstream services sector has increased the probability of exporting and export sales shares of firms producing in downstream manufacturing industries. The results suggest that the effect of services liberalization on manufacturing firms' export performance is stronger for initially more productive firms. These empirical findings are robust to alternative econometric specifications that control for other reforms, industry, firm characteristics and that deal with potential reverse causality concerns.

Suggested Citation

  • Maria Bas, 2014. "Does services liberalization affect manufacturing firms’ export performance? Evidence from India," Post-Print hal-01297201, HAL.
    • Handle: RePEc:hal:journl:hal-01297201
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    Cited by:

    1. Fan, Zhaobin & Bian, Ruimin & Anwar, Sajid, 2024. "Can digital transformation of services promote participation in manufacturing global value chains?," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1074-1092.
    2. Feng, Rui & Shen, Chen & Huang, Liangxiong & Tang, Xuan, 2022. "Does trade in services improve carbon efficiency? —Analysis based on international panel data," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    3. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series 031, World Institute for Development Economic Research (UNU-WIDER).
    4. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series wp-2017-31, World Institute for Development Economic Research (UNU-WIDER).
    5. Christine de la Maisonneuve, 2016. "How to boost export performance in Greece," OECD Economics Department Working Papers 1299, OECD Publishing.
    6. Gnangnon, Sèna Kimm, 2020. "Aid for Trade and Services Export Diversification in Recipient-Countries," EconStor Preprints 210467, ZBW - Leibniz Information Centre for Economics.
    7. World Bank Group, 2016. "Services and Manufacturing Linkages," World Bank Publications - Reports 24040, The World Bank Group.
    8. Sèna K. Gnangnon, 2021. "Aid for Trade and services export diversification in recipient countries," Australian Economic Papers, Wiley Blackwell, vol. 60(2), pages 189-225, June.
    9. Fida Karam & Chahir Zaki, 2020. "A new dawn for MENA firms: service trade liberalization for more competitive exports," Applied Economics, Taylor & Francis Journals, vol. 52(1), pages 19-35, January.
    10. Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2017. "Services trade policy and manufacturing productivity: The role of institutions," Journal of International Economics, Elsevier, vol. 104(C), pages 166-182.
    11. Sudhir Rana & Partha P. Saikia & Munim K. Barai, 2018. "Globalization and Indian Manufacturing Enterprises," FIIB Business Review, , vol. 7(3), pages 167-175, September.
    12. Zongo, Amara, 2021. "The impact of services trade restrictiveness on food trade," International Economics, Elsevier, vol. 166(C), pages 71-94.
    13. Lingduo Jiang & Shuangshuang Liu & Guofeng Zhang, 2022. "Digital trade barriers and export performance: Evidence from China," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1401-1430, April.
    14. Fiorini, Matteo & Hoekman, Bernard, 2018. "Services trade policy and sustainable development," World Development, Elsevier, vol. 112(C), pages 1-12.
    15. Bai, Zhuoran & Meng, Shuang & Miao, Zhuang & Zhang, Yan, 2019. "Services Liberalization and Export Diversity: Theory and Evidence from Chinese Firms," MPRA Paper 95862, University Library of Munich, Germany.
    16. Huang, Geng & Lin, Xi & He, Ling-Yun, 2023. "Good for the environment? Foreign investment opening in service sector and firm's energy efficiency," Energy Economics, Elsevier, vol. 127(PA).
    17. Hayakawa, Kazunobu & Mukunoki, Hiroshi & Yang, Chih-hai, 2020. "Liberalization for services FDI and export quality: Evidence from China," Journal of the Japanese and International Economies, Elsevier, vol. 55(C).
    18. Matteo Fiorini & Bernard Hoekman & Clément Malgouyres, 2018. "Services policy reform and manufacturing employment: Evidence from transition economies," The World Economy, Wiley Blackwell, vol. 41(9), pages 2320-2348, September.
    19. Bas, Maria, 2020. "The effect of communication and energy services reform on manufacturing firms’ innovation," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 339-362.
    20. Tulus Suryanto & Darul Dimasqy & Reza Ronaldo & Mahjus Ekananda & Teuku Heru Dinata & Indra Tumbelaka, 2020. "The Influence of Liberalization on Innovation, Performance, and Competition Level of Insurance Industry in Indonesia," Sustainability, MDPI, vol. 12(24), pages 1-25, December.
    21. Mulyukova, Alina, 2025. "Services liberalization and product variety of manufacturing firms," Kiel Working Papers 2294, Kiel Institute for the World Economy.
    22. Zhuoran Bai & Shuang Meng & Zhuang Miao & Yan Zhang, 2023. "Liberalization for services foreign direct investment and product mix adjustment: Evidence from Chinese exporting firms," Review of International Economics, Wiley Blackwell, vol. 31(2), pages 363-388, May.
    23. Chen, Fuzhong & Luo, Ke & Taghizadeh-Hesary, Farhad, 2025. "How does upstream service liberalization benefit downstream manufacturing firms’ emissions reduction performance?," Energy Economics, Elsevier, vol. 145(C).
    24. Liang, Wenjing & Yu, Weihua & Yao, Xin, 2025. "Liberalization of upstream productive services and green innovation in downstream manufacturing firms: Evidence from China," Energy Economics, Elsevier, vol. 142(C).
    25. Wu, Feifei & Liu, Lei & Gao, Bo & Wu, Yanrui, 2025. "How services liberalization shapes functional specialization in developing countries?," China Economic Review, Elsevier, vol. 91(C).

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    Keywords

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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • F1 - International Economics - - Trade
    • L8 - Industrial Organization - - Industry Studies: Services

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