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Pooja Thakur ¹, L. G. Burange ¹

Affiliations
1 Department of Economics, University of Mumbai, Mumbai 400032, IN

Abstract

The paper studies productivity spillovers from foreign direct investment (FDI) in the manufacturing sector of India. Using firm-level data for the period 2000 to 2010, both horizontal and vertical (backward and forward) spillovers have been tested with the help of panel data fixed effects 'within' model. It is inferred that backward vertical spillovers and forward vertical spillovers positively affect Total Factor Productivity (TFP) of the manufacturing sector. Spillovers through horizontal channels are, however, encountered to be negative. Furthermore, productivity spillovers vary across various industries of the manufacturing sector. Spillovers through backward vertical channels are more pronounced than forward vertical spillovers and horizontal spillovers. The absorptive capacity of the manufacturing sector is also encountered to be weak.

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L. G. Burange ¹, Rucha R. Ranadive ²

Affiliations
1 International Economics, Department of Economics, University of Mumbai, Vidyanagari, Kalina, Santacruz (E), Mumbai 400098, IN
2 Department of Economics, University of Mumbai, Vidyanagari, Kalina, Santacruz (E), Mumbai 400098, IN

Abstract

The paper analyses the performance and growth of the manufacturing sector of Maharashtra for the period 1998-1999 to 2009-2010 at aggregated and disaggregated levels. The state's share in the manufacturing sector of India has declined over this period. The overall growth rates of number of workers, output, value-added and capital are lower than those of India. Paper and paper products, chemicals, machinery and equipments, electrical instruments and automobiles are some of the major industries located within the state. The manufacturing sector uses more capital-intensive technique which is adversely affecting the employment growth.

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L. G. Burange ¹, Shruti Yamini ¹

Affiliations
1 Department of Economics, University of Mumbai, Vidyanagari, Kalina, Santacruz (E), Mumbai 400098, IN

Abstract

The cement industry is experiencing a boom on account of the overall growth of the Indian economy primarily because of increased industrial activity, flourishing real estate business, growing construction activity, and expanding investment in the infrastructure sector. The performance of the industry, under different policy regimes, truly establishes that decontrol of the industry and liberalization of the economy has led to remarkable improvement in the indicators such as installed capacity, capacity utilization, per capita consumption and exports. Positive trends can be evidenced in some of the other indicators too namely technology, prices and regional and market concentration. The competitiveness among the firms in the Indian cement industry has also been evaluated for the year 2006-2007. Out of the sample of 17 firms (90.21 per cent of the market share), about 47 per cent have recorded above industry average performance in the overall competitiveness index. The marginal difference between the indices of competitiveness of different firms reveals the tough competition among the firms in the industry.

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L. G. Burange ¹, Sheetal J. Chaddha ¹

Affiliations
1 Department of Economics, University of Mumbai, Vidyanagari, Kalina, Santacruz (E), Mumbai 400 098, IN

Abstract

With the withering away of 'protectionist' policies, the trade pattern of India is likely to march in the direction of its comparative advantage. This paper assesses India's Revealed Comparative Advantage (RCA) in merchandise trade. The structure of comparative advantage in India and its change from 1996 to 2005 is evaluated. Data as per the Harmonized System (HS) of classification are used to compute the index of RCA for exports as well as for imports. India appears to enjoy comparative advantage in the exports of labour-intensive items like textiles and scale-intensive items such as chemicals, iron and steel.

The paper also evaluates India's RCA in exports and imports in different types of goods categorized on the basis of their production. These include 'Ricardo', 'Heckscher-Ohlin', 'Product-cycle' goods and 'Others'. India appears to have a comparative advantage in the exports of Ricardo and Heckscher-Ohlin goods. Product-cycle goods, in contrast, do not display any improvement in the RCA universe. On the import front, it is the Ricardo goods where India appears to enjoy comparative advantage. The production with standard technology shifting towards developing economies like India implies a relative absence of RCA in the imports of Heckscher-Ohlin goods.

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L. G. Burange

Abstract

The main objectives of this study are threefold, (i) to estimate a continuous series of capacity utilization from 1951 to 1986-87 in manufacturing sector of the Indian economy, (ii) to make a programme for utilization of idle capacity, and (iii) to analyse the implications of full utilization of capacity in the economy.

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L. G. Burange

Abstract

This paper estimates the implications of full capacity utilization of manufacturing sector in Indian economy using the I-O framework. The study is carried out using the open Leontief model and also the semi-closed model endogenizing household demand. The working of the above models are illustrated using 1973-74 data. By fully utilizing the capacity of the manufacturing sector the output, income and employment increases by 22.86, 16.31 and 14.11 per cent respectively in open model and will increase by 38.68, 37.08 and 38.59 per cent in the semi-closed model. The output elasticity for the economy is 0.4048 and 0.6849 in open and semi-closed model respectively. The sectors 'mining and quarrying', 'banking and Insurance' and 'electricity' show high output elasticities.

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L. G. Burange

Abstract

* Appendix 1.

* Appendix 2.

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L. G. Burange ¹

Affiliations
1 University of Bombay, Mumbai, IN

Abstract

This paper makes an attempt to examine employment growth in the organised manufacturing sector of the states, the regions and the country during the pre- and post-liberalisation periods on the basis of ASI data.

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L. G. Burange ¹, Neha N. Karnik ¹

Affiliations
1 Department of Economics, University of Mumbai, Mumbai, IN

Abstract

The paper attempts to evaluate export competitiveness of BRIC for merchandise trade, covering the period from 1997 to 2013. The study analyses the structure of the Revealed Comparative Advantage (RCA) at Section, Chapter and Product levels. The study further tries to investigate the RCA of BRIC for different types of classification at the product level, i.e., Trade classification, UNCTAD classification and WTO classification. According to Trade Classification, Brazil, Russia and India enjoy RCA for the export of Ricardo products (products which use natural resources for their production). For Heckscher-Ohlin products (produced with standard technology with lowR&D intensity), India and China show competitiveness mainly due to abundant labour endowment. However, in the group, only China depicts RCA in the export of Product-cycle products (technology-intensive with high R&D intensity) because of FDI which helped China to gain RCA from 2005 onwards. UNCTAD Classification suggests that with the exception of China all other BRIC members enjoy export competitiveness for primary goods. Moreover, BRIC invariably shows export competitiveness for low-technology skill-based products. However, none of the member countries of BRIC exhibit advantage in exporting medium and high-technology skill-based products with the exception of China. On the basis of massive FDI inflows accompanied by advanced technology, China exhibits RCA in high-technology skill-based products from 2003 onwards. As per WTO Classification, BRIC lost its export competitiveness for agricultural products from 2003 onwards. However, Brazil maintains its comparative advantage for agricultural,raw material and intermediate products. India and China retain their competitiveness for consumer products. As far as capital goods are concerned, China is the only country in the group that started to gain competitiveness from 2003 onwards.

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L. G. Burange ¹, Rucha R. Ranadive ¹

Affiliations
1 Department of Economics, University of Mumbai, Mumbai, IN

Abstract

The manufacturing sector of a country is generally considered an engine of growth. The performance of the manufacturing sector in India has become a central issue during the post-reform period which needs to be assessed empirically. The share of employment, output, gross value added and capital of the industrially developed states such as Maharashtra, Gujarat and Tamil Nadu was high in the organised manufacturing sector. Even so, their growth rates of the organised manufacturing sector were quite low compared to the other small states such as Uttarakhand, Jammu and Kashmir and Himachal Pradesh. The higher growth rates of these states could be the result of the narrow industrial base which has enabled the State Governments to focus on a few industries. Due to their targeted policies, these states have encouraged many industries to set up their plants there. Industrially developed states showcased less concentration of industries in their manufacturing sectors while industrially less developed states such as Odisha, Jharkhand, Chhattisgarh and Goa registered high concentration over the period. It is also observed that industrially developed states have more localised industries whereas Andhra Pradesh, Chhattisgarh, Kerala and Odisha have only a few localised industries. The assessment of the factor intensity of the states/UTs reveals that the industrially developed states made higher use of the capital-intensive techniques. Over the period of the study, the states have exhibited shifts in their factor intensities used in the production process. Uttarakhand, Chhattisgarh and Jammu and Kashmir have registered higher number of workers per factory unit. The study concludes that there is still high potential in the manufacturing sector of the states/UTs which needs to be exploited through concrete policy actions over the coming years.

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L. G. Burange ¹, Pooja Thakur

Affiliations
1 Department of Economics, University of Mumbai, Mumbai, IN

Abstract

The paper attempts to analyse the trends in the organised sector employment of India for the period 1961 to 2010. It is found that, employment in the organised sector, is in a state of decline, exhibiting a downward trend throughout the period of analysis. The era of socialistic growth pattern (till mid 1980s) was more favourable for the public sector development than the private sector. Despite this, the share of public sector employment has been modest, and decreased after 1990s. Employment in the organised sector was expected to surge in the post-reform period; however, the adoption of reforms has worsened its employment generation potential. The public sector exhibits poor performance in the post-reform era, while employment creation capacity of the private sector has not increased to the level expected, in spite of its broadened scope. Within the industry groups, manufacturing is the worst performer in both the segments. The services sectors, mainly finance and transport, helped generating substantial employment in the aftermath of the reforms. This holds true, however, in the case of private sector only.

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L. G. Burange ¹, Shruti Yamini

Affiliations
1 Department of Economics, University of Mumbai, Mumbai, IN

Abstract

The paper examines the performance of Indian iron and steel industry in the pre and post-liberalisation periods in terms of primary indicators such as production, consumption and foreign trade. It also studies growth in capacity utilisation, prices and employment. It is deduced that the industry has grown manifold in all the aspects, especially after the liberalisation of the economy except employment, which shows a substantial fall during post-liberalisation when competition among the Indian manufacturing firms has increased. Therefore, that leads us to investigate the competitiveness of the sample firms in the industry through composite competitiveness indices. On the basis of overall competitiveness, as well as financial and non-financial aspects of competitiveness, the industry is mostly dominated by Tata Steel Ltd., even though SAIL has a greater market share and proves to be superior with respect to non-financial indicators.

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L. G. Burange ¹, Sheetal J. Chaddha

Affiliations
1 Department of Economics, University of Mumbai, IN

Abstract

In the wake of economic reforms adopted by India in the 1990s, the intra-industry trade (IIT) of the country was expected to expand. The paper attempts to assess the growth in India's IIT for a 19-year period from 1987-88 to 2005-06.

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L. G. Burange ¹, Hemangi K. Kelkar ²

Affiliations
1 International Economics, Department of Economics (Autonomous), University of Mumbai, Mumbai-400 098, IN
2 Department of Economics (Autonomous), University of Mumbai, Mumbai 400 098, IN

Abstract

Following the economic liberalisation that took place in the early 1990s in India, the share of intra-industry trade (IIT) in total trade has increased significantly. Various factors such as the rise in Per Capita Income (PCI), Gross Domestic Product (GDP), product differentiation, ease of entry for foreign firms and reduction in trade barriers have been found to be the major determinants of IIT. These determinants of IIT have varied from country to country. However, there is an issue of whether a country’s IIT is dominated by vertical IIT (VIIT) or horizontal IIT (HIIT). Various methodologies have been developed to examine this segregation. The present paperattempts to modify the existing methodologies related to segregation of IIT by attempting to identify the determinants of India’s IIT during the period of 1990-91 to 2015-16. The trends in IIT show that India’s IIT is dominated by VIIT though the HIIT is increasing at a higher rate over the period from 1990-91 to 2015-16. This study applies the Toda and Yamamoto method and also uses the modified Granger causality test to identify the causal relationship between IIT and its determinants. A unidirectional causality is observed from GDP, trade openness and PCI to IIT while unidirectional causality is found from EP and trade openness to HIIT.

Keywords

IIT, Granger Causality, VIIT, HIIT JEL Codes: F140.

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Neha N. Karnik ¹, L. G. Burange ¹

Affiliations
1 Mumbai School of Economics and Public Policy, University of Mumbai, Mumbai, IN

Abstract

The paper tries to examine trends of merchandise bilateral trade between India and Japan during the period from 1990-91 to 2015-16, using Quantity Index and Unit Value Index. It also evaluates and compares international and bilateral competitiveness of India and Japan during 1996 to 2015. The paper examines intra-industry trade (IIT) by constructing Grubel and Lloyd (G-L) index between India and Japan. It also decomposes India’s IIT with Japan into horizontal IIT and vertical IIT and further, segregates vertical IIT into low quality and high quality IIT using Product Quality Index. India’s IIT with Japan is displaying a positive trend. However, it has been dominated by horizontally differentiated products in terms of both number and share in the value of total merchandise trade between India and Japan. High economic growth and increase in per capita income of India resulted in higher demand as well as supply for horizontally differentiated products.

Keywords

Trade, Quantum Index, Unit Value Index, Revealed Comparative Advantage, Intraindustry Trade, Horizontal Intra-Industry Trade, Vertical Intra-Industry Trade.

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