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Export Performance, Innovation, and Productivity in Indian Manufacturing Firms

Santosh Kumar Sahu, Sunder Ramaswamy and Abishek Choutagunta
Madras School of Economics, Working Paper, February 2017
This study re-examines the relationship between export performance and productivity in manufacturing firms in India for the period 2003-2015, using firm level information. Departing from the earlier studies on India economy,
we argue that product innovations boost export performance of the economy. The hypothesis being that, in the post-economic-reforms era competitive export market scenario, productivity alone, without product innovation and participation in R and D cannot drive export performance. We observe that the argument of highly productive firms
entering the export market without reallocating resources towards innovation and R and D seems to be invalid in our sample. Nevertheless, we find in our sample, that productivity as a selection criterion coupled with advertising and marketing strategies explains participation in R and D in boosting exports.
Courtesy :MSE

One size does not fit all: An analysis of the importance of industry-specific vertical policies for growing high technology industries in India

Sunil Mani
in India Development Report 2017, Edited by Mahendra Dev.
Oxford University Press.

[From the Introduction]
India, currently (c. 2015) is noe of the fastest growing countries in the world. But this growth is largely driven by its services sector. From around 2006 or so, country has been striving to industrialize through the manufacturing route as growth driven by the manufacturing sector has a long-lasting economic benefits.


Measuring Productivity at the Industry Level – The India KLEMS Database

Deb Kusum Das; Abdul Azeez Erumban; Suresh Aggarwal and Pilu Chandra Das

Reserve Bank of India, 2017

Chapter 1: Introduction
1.1 Background
1.2 Coverage: Industries and Variables
Chapter 2: Gross Value Added Series at the Industry Level
2.1 Methodology
2.2 Implementation Procedure
2.3 Outstanding Issues
Chapter 3: Gross Output Series at the Industry Level
3.1 Methodology
3.2 Implementation Procedure
3.3 Outstanding Issues
Chapter 4: Labour Input Series at the Industry Level
4.1 Methodology
4.2 Implementation Procedure
4.3 Outstanding Issues
Chapter 5: Capital Input Series at the Industry Level
5.1 Methodology
5.2 Data and Sources
Chapter 6: Intermediate Input Series at the Industry Level
6.1 Methodology
6.2 Implementation Procedure
6.3 Outstanding Issues
Chapter 7: Factor Income Share Series at the Industry Level
7.1 Methodology for Measuring Labour Income Share Series
7.2 Implementation Procedure
7.3. Outstanding Issues
Chapter 8: Growth Accounting Methodology
8.1 Methodology for Measuring Productivity Growth at the Industry level
8.2 Methodology for Aggregation across Industries
8.3 Implementation Procedure
List of Appendixes
Appendix A: Concordance table of INDIA KLEMS industries (minimal) with NICs
Appendix B: Employment Unemployment Survey (EUS) rounds of NSS
Appendix C: Definitions of Employment in NSSO employment & unemployment surveys
Appendix D: Concordance table of KLEMS industries and IOTT industries
Appendix Table 1: Population, WFPR and Persons Employed in Different EUS Rounds
List of Tables
Table 1.1: Industrial Classification for Phase I and II of the Project
Table 1.2: Variables in INDIA KLEMS Multifactor Productivity Database for 27 Industries (Annual Time Series 1980-81 onwards)
Table 2.1: List of Manufacturing Industries for which GVA data is directly available from NAS
Table 2.2: List of Manufacturing Industries for which Gross Output data is obtained by adjusting data for NAS Industries
Table 3.1: List of Manufacturing Industries for which Gross Output is directly available from NAS
Table 3.2: List of Manufacturing Industries for which Gross Output data is obtained by adjusting data for NAS Industries
Table 5.1: Capital Asset Types in National Accounts Statistics and Corresponding Our Study Types
Table 5.2: Asset Types in ASI and India KLEMS
Table 5.3: Asset Categories in NSSO Rounds
Table 5.4: Depreciation Rate by Asset Type Used in the Computation of Capital Input
Table 7.1: NAS Sectors and Corresponding Study Industries, for Computation of Labour Income Share
Table 7.2: Industries and Groups for which ƞ (proportion of labour income out of mixed income) has been estimated
List of Box
Box 1: The Heckman model

URL : https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=881

Courtesy: Reserve Bank of India

Doing Business 2018 : Reforming to Create Jobs

The World Bank

Fifteen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2018 measures aspects of regulation affecting 10 areas of everyday business activity: • Starting a business • Dealing with construction permits • Getting electricity • Registering property • Getting credit • Protecting minority investors • Paying taxes • Trading across borders • Enforcing contracts • Resolving insolvency These areas are included in the distance to frontier score and ease of doing business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures. The report updates all indicators as of June 1, 2017, ranks economies on their overall “ease of doing business”, and analyzes reforms to business regulation – identifying which economies are strengthening their business environment the most. Doing Business illustrates how reforms in business regulations are being used to analyze economic outcomes for domestic entrepreneurs and for the wider economy. It is a flagship product produced in partnership by the World Bank Group that garners worldwide attention on regulatory barriers to entrepreneurship. More than 137 economies have used the Doing Business indicators to shape reform agendas and monitor improvements on the ground. In addition, the Doing Business data has generated over 2,182 articles in peer-reviewed academic journals since its inception.

URL – https://openknowledge.worldbank.org/handle/10986/28608
Courtesy – The World Bank

Corporate Debt Maturity in Developing Countries : Sources of Long- and Short-Termism

World Bank, 2017
This paper documents to what extent firms from developing countries borrow short versus long term, using data on corporate bond and syndicated loan markets. Contrary to claims in the literature based on firm balance sheets, firms from developing countries borrow through bonds and syndicated loans at maturities similar to those obtained by developed country firms. The composition and use of financing matters. Firms from developing countries borrow shorter term in domestic bond markets, but the differences in international issuances (accounting for most of the proceeds) are significantly smaller. Developing country firms borrow longer term in syndicated loan markets, which they partially use for infrastructure projects. However, only large firms from developing countries (similar in size to those from developed ones) issue bonds and syndicated loans. The short-termism in developing countries is partly explained by a lower proportion of firms using these markets, with more firms relying on other shorter-term instruments.
Courtesy : World Bank eLibrary

Anti-corruption, marketisation and firm behaviours: Evidence from firm innovation in China

Li Dang & Ruilong Yang

China has launched an anti-corruption campaign since the Eighteenth CPC National Congress, which has exerted widespread influences on Chinese politics and economy. This paper examines the effect of the anti-corruption initiative on firm behaviours from the perspective of research and development (R&D) investments. It shows that pursuing political connections and improving innovation are two mutually exclusive alternatives for firm growth in China. The anti-corruption campaign raises the cost of seeking for political bond and strengthens the incentive for firm innovation. After anti-corruption policies and regulations were issued, R&D expenditure in politically connected firms increases significantly; the anti-corruption initiative has positive effects on firm innovation. Further research shows that the effects vary with different types of firms. For state-owned enterprises (SOEs), the anti-corruption initiative only increases the R&D investments of firms with senior executives who used to serve in the government; while for non-state-owned enterprises (non-SOEs), this campaign has all-around positive effects on their R&D investments. In the meantime, a heterogeneity at the provincial level is observed: R&D investments of firms with political connections increase more significantly in provinces with more intense anti-corruption efforts. Finally, marketisation also has a role to play. For regions with a more developed market economy, anti-corruption increases the innovation of firms with political connections; whereas in regions with a less developed market economy, this effect is insignificant. This paper provides evidence for the opinion that anti-corruption is favourable to economic growth in China. To solve the endogeneity problem, it uses data obtained from the anti-corruption policy experiment since the Eighteenth CPC National Congress and the difference-in-differences (DID) method to further test the hypotheses.


URL: http://www.tandfonline.com/doi/full/10.1080/20954816.2016.1152093

Courtesy: T&F

Trouble in the Making? : The Future of Manufacturing-Led Development

The World Bank,2017
Abstract : Globalization and new technologies are impacting the desirability and feasibility of what has historically been the most successful development strategy. Manufacturing has been seen as special, promising both productivity gains and job creation. But trade is slowing. Global value chains (GVC) are maturing. Robotics, artificial intelligence, 3D printing, and the Internet of things are shifting what makes locations attractive for production and threatening significant disruptions in employment. There is a risk of increased polarization, within countries and across countries. Shifting the attention from high-income countries, this report takes the perspective of developing countries to ask: — If new technologies reduce the importance of low-wage labor, how can developing countries compete? — Do countries need to industrialize to develop? — How can countries at different levels of development take advantage of new opportunities? Development strategies need to broaden. Different manufacturing sub-sectors can still provide productivity growth or jobs; fewer can deliver both. Many of the pro-development characteristics traditionally associated with manufacturing–tradability, scale, innovation, learning-by-doing–are increasingly features of services. With faster diffusion of technology, it will be all the more important for countries to improve the enabling environment, remain open to trade, and support capabilities of firms and workers to ensure future prosperity is shared.
Courtesy : World Bank Group