Back on the Rails: Competition and Productivity in State-Owned Industry

51 Pages Posted: 10 May 2010 Last revised: 28 Aug 2010

See all articles by Sanghamitra Das

Sanghamitra Das

Indian Statistical Institute

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Sergey Lychagin

Central European University (CEU)

Rohini Somanathan

University of Delhi - Department of Economics

Date Written: May 2010

Abstract

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.

Suggested Citation

Das, Sanghamitra and Krishna, Kala and Lychagin, Sergey and Somanathan, Rohini, Back on the Rails: Competition and Productivity in State-Owned Industry (May 2010). NBER Working Paper No. w15976. Available at SSRN: https://ssrn.com/abstract=1601727

Sanghamitra Das (Contact Author)

Indian Statistical Institute ( email )

7 S.J.S. Sansanwal Marg
Planning Unit
New Delhi - 110016
India

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

523 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sergey Lychagin

Central European University (CEU) ( email )

Nador utca 9
Budapest, H-1051
Hungary

HOME PAGE: http://www.personal.ceu.hu/staff/Sergey_Lychagin/

Rohini Somanathan

University of Delhi - Department of Economics ( email )

Delhi-110007
India

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