NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Leslie A. Martin

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Working Papers

February 2014In with the Big, Out with the Small: Removing Small-Scale Reservations in India
with Shanthi Nataraj, Ann Harrison: w19942
For the past 60 years, India has promoted small-scale industries (SSI). Industrial promotion took the form of reserving certain products for manufacture by small and medium firms. The stated goal of Indian policy makers was to promote employment growth and income redistribution. In this paper, we use a new version of the Annual Survey of Industries (ASI) that allows us to follow plants over time and examine whether small factories in India exhibit faster employment growth than larger factories. We find that, as in the United States, larger, younger factories grow more quickly and create more jobs than smaller, older factories. We then exploit the fact that India eliminated SSI reservations for more than half of all reserved products between 1997 and 2007 to identify the consequences of re...
January 2011Learning Versus Stealing: How Important are Market-Share Reallocations to India's Productivity Growth?
with Ann E. Harrison, Shanthi Nataraj: w16733
The new trade theory emphasizes the role of market-share reallocations across firms (“stealing”) in driving productivity growth, while the older 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 did play an important role in aggregate productivity gains immediately following the start of India’s trade reforms in 1991. However, aggregate productivity gains during the overall 20-year period from 1985 to 2004 were driven largely by improvements in average productivity. By exploiting the variation in reforms across industries, we document that the average productivity increases can be attributed to India’s trade liberalization and FDI reforms. Finally, w...

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