Market Reforms and Industrial Productivity: An Explanation

17 Pages Posted: 14 May 2004

See all articles by Murali Patibandla

Murali Patibandla

Copenhagen Business School - Department of International Economics and Management; Indian Institute of Management, Bangalore

Phani BV

Indian Institute of Technology Kanpur

Abstract

Several developing economies, such as India, that had implemented policy reforms towards market mechanism have been experiencing high economic growth. This paper brings out the factors that determine micro level firm level productivity in the context of a developing economy that had undertaken the policy reforms towards a freer market. It econometrically tests a few hypotheses on the basis of firm level panel data for a set of Indian industries. One of the strong results of the paper is that firm level outward orientation of exports and imports contributes significantly and positively to firm level productivity. This finding supports one of the propositions of the new growth theory that developing economies benefit significantly with free trade with developed economies through free flow of new ideas and technologies and externalities.

Keywords: Market reforms, openness, performance and productivity

JEL Classification: D21, F14, O40

Suggested Citation

Patibandla, Murali and Bollempalli, Venkata Phani, Market Reforms and Industrial Productivity: An Explanation. Available at SSRN: https://ssrn.com/abstract=545442 or http://dx.doi.org/10.2139/ssrn.545442

Murali Patibandla (Contact Author)

Copenhagen Business School - Department of International Economics and Management ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Indian Institute of Management, Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka
India

Venkata Phani Bollempalli

Indian Institute of Technology Kanpur ( email )

IME, IIT Kanpur
Kanpur, Uttar Pradesh 208016
India
+91-512-2597877 (Phone)
+91-512-2597553 (Fax)

HOME PAGE: http://iitk.ac.in/new/b-v-phani

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