Monday, July 25, 2011

28 July 2011: India's Mysterious Manufacturing Miracle

Gunjan Sharma
University of Missouri

Using data on formal manufacturing plants in India, we report a large
but imprecise acceleration in productivity growth starting around the
mid-1990s (e.g. 1993-2004 compared to 1980-1992). We trace the
acceleration to productivity growth within large plants (200 workers
or more), as opposed to reallocation across such plants. As many
economists believe Indian reforms during this era improved resource
allocation, the absence of a growth pickup from reallocation is
surprising. Moreover, when we look across industries we fail to
robustly relate productivity growth to prominent reforms such as
industrial de-licensing, tariff reductions, FDI liberalization, or
lifting of small-scale industry reservations. Even under a generous
reading of their effects, these reforms (at least as we measure them)
seem to account for less than one-quarter of overall productivity

Date: July 28, 2011
Time: 03:00 P.M.

AMEX Conference Room (Second Floor),
Department of Economics,
Delhi School of Economics,
New Delhi-110007(INDIA)


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