TY - JOUR
T1 - Trade liberalization, market discipline and productivity growth
T2 - new evidence from India
AU - Krishna, Pravin
AU - Mitra, Devashish
PY - 1998/11/16
Y1 - 1998/11/16
N2 - This paper investigates the effects on competition and productivity of the dramatic 1991 trade liberalization in India. Using firm-level data from a variety of industries, we find strong evidence of an increase in competition (as reflected in the reductions in price-marginal cost markups) and some evidence of an increase in the growth rate of productivity. The methodological framework differs from earlier studies in that we 'allow' for returns to scale to change after the liberation, a relaxation of estimation restrictions that improves our estimates allowing more accurate (partial equilibrium) computation of welfare changes. Welfare analysis using the estimated parameters mostly suggests an increase in welfare, albeit quite small, in the sectors analyzed.
AB - This paper investigates the effects on competition and productivity of the dramatic 1991 trade liberalization in India. Using firm-level data from a variety of industries, we find strong evidence of an increase in competition (as reflected in the reductions in price-marginal cost markups) and some evidence of an increase in the growth rate of productivity. The methodological framework differs from earlier studies in that we 'allow' for returns to scale to change after the liberation, a relaxation of estimation restrictions that improves our estimates allowing more accurate (partial equilibrium) computation of welfare changes. Welfare analysis using the estimated parameters mostly suggests an increase in welfare, albeit quite small, in the sectors analyzed.
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U2 - 10.1016/S0304-3878(98)00074-1
DO - 10.1016/S0304-3878(98)00074-1
M3 - Article
AN - SCOPUS:0031756671
VL - 56
SP - 447
EP - 462
JO - Journal of Development of Economics
JF - Journal of Development of Economics
SN - 0304-3878
IS - 2
ER -