TY  - JOUR
AU  - Harrison,Ann E.
AU  - Martin,Leslie A.
AU  - Nataraj,Shanthi
TI  - Learning Versus Stealing: How Important are Market-Share Reallocations to India's Productivity Growth?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16733
PY  - 2011
Y2  - January 2011
UR  - http://www.nber.org/papers/w16733
L1  - http://www.nber.org/papers/w16733.pdf
N1  - Author contact info:
Ann Harrison
The Wharton School
University of Pennsylvania
2016 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6370
Tel: 215 746 3132
E-Mail: annh@wharton.upenn.edu

Leslie A. Martin
University of California, Berkeley
Agricultural and Resource Economics
310 Giannini Hall
Berkeley, CA 94720
E-Mail: llamartin@berkeley.edu

Shanthi Nataraj
RAND Corporation
1776 Main Street
Santa Monica, CA 90407
E-Mail: snataraj@rand.org
AB  - 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.
ER  -