b TFP grew at 03 and 11 in those two periods respectvely 8 Even though these

B tfp grew at 03 and 11 in those two periods

This preview shows page 9 - 12 out of 25 pages.

b. TFP grew at 0.3% and 1.1% in those two periods, respectvely. 8. Even though these rates are much lower than those in China, compared to the past these represent a signifcant advance for India . a. The Indian reforms seem partcularly to have been associated with a more vigorous and compettve corporate sector . b. As an empirical confrmaton, on the basis of a panel data-set of large corporate frms Goldberg et al. (2008) show that the reducton in input tarifs led to large dynamic gains from trade over the period 1989-2003, through the import of new varietes of inputs leading to an explosion of new domestc product varietes. 8 Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
Image of page 9

Subscribe to view the full document.

c. Of course, most of the economy is not in the corporate sector ; about 45% of even non-farm output and about 85% of non-farm employment are outside the organized sector (public or private). 9. It is, however, very likely that the reducton in controls and regulatons and the increased leeway of market discipline and forces of competton may have unleashed entrepreneurial energies in both the formal and informal sectors and also forged additonal links between the two sectors -links of subcontractng and consumer demand initated by the formal sector. (Bardhan says that he also speculates that the concurrent social changes in India, in the politcal rise of hitherto subordinate social groups afer many centuries of social oppression, may also have played some role in this unleashing of energies.) 10. But the relatvely low levels of educaton of workers and of female labor force partcipaton, in additon to weak infrastructure, act as a damper on India's growth, partcularly compared to China . 11. We have discussed the industrial growth performance in the two countries in the aggregate. a. For more detailed individual industry level productvity comparisons one needs to go beyond nominal fgures in natonal currency units and convert them into a common unit of measurement using properly constructed purchasing power parites (PPPs). b. This is rarely done. But we do have some detailed industry-level comparisons in PPP terms for the period 1980-2004 from Wu, Rao, and Lee (2008). They fnd that the comparisons are diferent for four diferent industry groups. i. The frst group consists of machinery and equipment (including electrical, informaton/communicatons, instrumentaton/measuring, and transportaton equipment). In group one, industries in India were more 9 Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
Image of page 10
productve than those in China at the beginning of the period but the gap declined over tme and even became negatve in some cases. ii. The second group includes food and beverages, chemicals, building materials, and metal products. In this group, industries in India remained on a par with those in China untl very recently.
Image of page 11

Subscribe to view the full document.

Image of page 12
  • Fall '18

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes