Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth?
Recent trade theory emphasizes the role of market-share reallocations across firms (“stealing”) in driving productivity growth, whereas previous literature focused on average productivity improvements (“learning”). We use comprehensive, firm-level data from India’s organized manufacturing sector...
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Oxford University Press on behalf of the World Bank
2014
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| Online Access: | http://hdl.handle.net/10986/21004 |
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okr-10986-210042021-04-23T14:04:01Z Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? Harrison, Ann E. Martin, Leslie A. Nataraj, Shanthi comparative advantage deflators economic research economics economies of scale growth projections international trade productivity productivity growth total factor productivity trade liberalization trade policy trade reforms wholesale price indices Recent trade theory emphasizes the role of market-share reallocations across firms (“stealing”) in driving productivity growth, whereas previous literature focused on average productivity improvements (“learning”). We use comprehensive, firm-level data from India’s organized manufacturing sector to show that market-share reallocations were briefly relevant to explain aggregate productivity gains following the beginning of India’s trade reforms in 1991. However, aggregate productivity gains during the period from 1985 to 2004 were largely driven by improvements in average productivity. We show that India’s trade, FDI, and licensing reforms are not associated with productivity gains stemming from market share reallocations. Instead, we find that most of the productivity improvements in Indian manufacturing occurred through “learning” and that this learning was linked to the reforms. In the Indian case, the evidence rejects the notion that market share reallocations are the mechanism through which trade reform increases aggregate productivity. Although a plausible response would be that India’s labor laws do not easily permit market share reallocations, we show that restrictions on labor mobility cannot explain our results. 2014-12-30T17:26:13Z 2014-12-30T17:26:13Z 2013-06 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/21004 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article South Asia India |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
en_US |
| topic |
comparative advantage deflators economic research economics economies of scale growth projections international trade productivity productivity growth total factor productivity trade liberalization trade policy trade reforms wholesale price indices |
| spellingShingle |
comparative advantage deflators economic research economics economies of scale growth projections international trade productivity productivity growth total factor productivity trade liberalization trade policy trade reforms wholesale price indices Harrison, Ann E. Martin, Leslie A. Nataraj, Shanthi Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? |
| geographic_facet |
South Asia India |
| description |
Recent trade theory emphasizes the role of market-share reallocations across firms
(“stealing”) in driving productivity growth, whereas previous literature focused on
average productivity improvements (“learning”). We use comprehensive, firm-level data
from India’s organized manufacturing sector to show that market-share reallocations
were briefly relevant to explain aggregate productivity gains following the beginning of
India’s trade reforms in 1991. However, aggregate productivity gains during the period
from 1985 to 2004 were largely driven by improvements in average productivity. We
show that India’s trade, FDI, and licensing reforms are not associated with productivity
gains stemming from market share reallocations. Instead, we find that most of the productivity improvements in Indian manufacturing occurred through “learning” and that
this learning was linked to the reforms. In the Indian case, the evidence rejects the
notion that market share reallocations are the mechanism through which trade reform
increases aggregate productivity. Although a plausible response would be that India’s
labor laws do not easily permit market share reallocations, we show that restrictions on
labor mobility cannot explain our results. |
| format |
Journal Article |
| author |
Harrison, Ann E. Martin, Leslie A. Nataraj, Shanthi |
| author_facet |
Harrison, Ann E. Martin, Leslie A. Nataraj, Shanthi |
| author_sort |
Harrison, Ann E. |
| title |
Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? |
| title_short |
Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? |
| title_full |
Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? |
| title_fullStr |
Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? |
| title_full_unstemmed |
Learning versus Stealing : How Important Are Market-Share Reallocations to India's Productivity Growth? |
| title_sort |
learning versus stealing : how important are market-share reallocations to india's productivity growth? |
| publisher |
Oxford University Press on behalf of the World Bank |
| publishDate |
2014 |
| url |
http://hdl.handle.net/10986/21004 |
| _version_ |
1764447706171834368 |