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Unformatted text preview: Besley & Burgess (2004) 38 Regulation and Development Development Economics, LSE Summer School 2007 Table 7 Labor Regulation and Industrial Performance in India: Industry Level Analysis 1980-1997 (1) (2) (3) (4) (5) Log registered Log registered Log registered Log number Log value added fixed factories per employee manufacturing manufacturing output employment capital Method OLS OLS OLS OLS OLS Labor regulation [t-1] -0.087*** -0.060*** -0.063* -0.041*** -0.026** (3.68) (3.19) (1.86) (2.86) (2.07) State * industry effects YES YES YES YES YES Year effects YES YES YES YES YES Industry time trends YES YES YES YES YES Adjusted R2 0.90 0.90 0.81 0.92 0.74 Observations 21323 21323 20539 21206 21254 Notes: Absolute t statistics calculated using robust standard errors clustered at the state-industry level are reported in parentheses, * significant at 10%, ** significant at 5%, *** significant at 1%. The data used in the regressions is a panel data set on 3-digit registered manufacturing industries across the sixteen main states of India for the period 1980-1997. The data form an unbalanced panel. Our anlaysis retains state industries which remain in the panel for at least ten years and within these industries we restrict our attention to firms which employ more than a hundred workers to get around the problem of smaller firms being excluded from the sample to maintain confidentiality. Using this a definition we have total of 101 3-digit industries in our panel with an average of 68 in a each state. State amendments to the Industrial Disputes Act are coded 1=pro-worker, 0=neutral, -1=pro-employer and then cumulated over the period to generate the labor regulation measure. The regressions include 3-digit industry time trends to help control for the possibility that industries experience different rates of technological change. See the Data Appendix for details on the construction and sources of the variables. ...
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