Back on the Rails: Competition and Productivity in State-owned Industry
NBER Working Paper No. 15976
We use a proprietary data set on the floor-level operations at the Bhilai Rail and Structural Mill in India to understand the determinants of changes in plant productivity in 2000-2003. During this period there was a 35 percent increase in output with minimal changes in factors of production, but sizable reductions in production delays. We model interruptions to the production process and find that a large part of these reductions are attributable to training. Our results suggest that specific knowledge-enhancing investments can have very high returns, and that the threat of competition provides powerful incentives to undertake such investments.
Published: Sanghamitra Das & Kala Krishna & Sergey Lychagin & Rohini Somanathan, 2013. "Back on the Rails: Competition and Productivity in State-Owned Industry," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 136-62, January.