Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

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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