NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Learning Versus Stealing: How Important are Market-Share Reallocations to India's Productivity Growth?

Ann E. Harrison, Leslie A. Martin, Shanthi Nataraj

NBER Working Paper No. 16733
Issued in January 2011
NBER Program(s):   EEE   ITI

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, we construct a panel dataset that allows us to track firms during this time period; our results suggest that while within-firm productivity improvements were important, much of the increase in average productivity also occured because of firm entry and exit.

download in pdf format
   (321 K)

email paper

This paper is available as PDF (321 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16733

Published: Ann E. Harrison & Leslie A. Martin & Shanthi Nataraj, 2013. "Learning versus Stealing: How Important Are Market-Share Reallocations to India's Productivity Growth?," World Bank Economic Review, World Bank Group, vol. 27(2), pages 202-228. citation courtesy of

Users who downloaded this paper also downloaded these:
Du, Harrison, and Jefferson w16767 FDI Spillovers and Industrial Policy: The Role of Tariffs and Tax Holidays
Dougherty, Frisancho, and Krishna w17693 Employment Protection Legislation and Plant-Level Productivity in India
Eichengreen and Gupta w16757 The Service Sector as India's Road to Economic Growth
Hsieh and Ossa w16778 A Global View of Productivity Growth in China
Chaney w16753 The Network Structure of International Trade
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us