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Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing

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  • Satish Chand
  • Kunal Sen

Abstract

The impact of trade liberalisation on productivity growth is still an empirical issue; the theoretical literature is as yet unclear on the direction of any such association. This paper develops an analytical framework and employs it to empirically test if trade liberalisation in Indian manufacturing has raised total factor productivity (TFP) growth. The answer is in the affirmative. Our results also support a key postulate of the new growth theories that liberalisation of the intermediate good sectors has a larger favourable impact on TFP growth than that of the final good sectors.
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  • Satish Chand & Kunal Sen, 1996. "Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing," Trade and Development 96/11, Australian National University, Department of Economics.
    • Handle: RePEc:wop:anuetd:9611
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    File URL: http://coombs.anu.edu.au/~ecopac/wpaper/wp1996/9611.prn
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    References listed on IDEAS

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    1. Aksoy, M. Ataman, 1992. "The Indian trade regime," Policy Research Working Paper Series 989, The World Bank.
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