Conference Presentations by C. Veeramani
ICRIER Working Paper, 292, 2014
Papers by C. Veeramani
On the whole, manufacturing growth in India failed to accelerate in spite of widespread trade ref... more On the whole, manufacturing growth in India failed to accelerate in spite of widespread trade reforms undertaken since the early 1990s. However, the picture is mixed if we look at the sub-national level. This paper attempts to examine the determinants of manufacturing performance at the state-level in a panel model framework for the time period 1988-2007. One aspect, which makes this paper distinct from other empirical exercises in this field, is the consideration of trade openness of the states as one of the determinants of manufacturing performance in addition to the other usual control variables such as infrastructure, access to credit, human capital and labour market environment. Data on trade is not available at the Indian state level. We therefore construct two proxies for trade openness, one relating to exports volume and the other related to tariff barriers, for the Indian states in our sample. In line with the conventional view, trade barriers have a negative impact on manu...
SSRN Electronic Journal, 2009
Knowledge accumulation in the richer countries provides them with comparative advantages in highe... more Knowledge accumulation in the richer countries provides them with comparative advantages in higher productivity products. The countries that import the higher productivity intermediate products and capital equipments produced in the richer countries, however, derive benefits from knowledge spillovers. The empirical analysis in this paper shows that what type of intermediate goods and capital equipments a country imports and from where it imports indeed matters for its long-run growth. Using highly disaggregated trade data for a large number of countries, we construct an index (denoted as IMPY) that measures the productivity level associated with a country's imports. Using instrumental variable method (to address the endogeneity problems), we find that a higher initial value of the IMPY index (for the year 1995) leads to a faster growth rate of income per capita in the subsequent years (during 1995-2005) and vice versa. The results imply that a 10% increase in IMPY increases growth by about 1.3 to1.9 percentage points, which is quite large.
Review of World Economics
Is it in the interest of a developing country to promote strong local linkages for domestic indus... more Is it in the interest of a developing country to promote strong local linkages for domestic industries or to participate in global value chains (GVCs) wherein linkages are globally dispersed? This paper informs this debate by empirically analyzing which one of these strategies would result in higher levels of domestic value added (DVA) and employment in India. Using a unique panel data on DVA and jobs tied to Indian exports from 112 sectors for the period 1999-2000 to 2012-2013, we show that greater backward GVC participation-use of imported inputs to produce for exports-leads to higher absolute levels of gross exports, DVA and employment. This result implies that labor abundant countries can reap dividends by adopting policies aimed at strengthening their backward participation in GVCs. Our findings are robust to various estimation techniques and instrumental variable approaches to address potential endogeneity concerns.
In the context of increasing contribution of developing countries in world trade, an important qu... more In the context of increasing contribution of developing countries in world trade, an important question is whether trade can be used as an instrument to stimulate higher participation of women in the labour market? Trade and industrial liberalization undertaken during the 1990s and 2000s marked the end of India's nearly four decade experiment with state directed, heavy industry based, and import substituting industrialization. In this context, the role of various trade and technology related factors in determining female employment intensity (FEI) is analyzed, in a panel of India's manufacturing industries for the period 1998-2008.
This paper analyses the impact of trade reforms on plant level markups using a panel data for the... more This paper analyses the impact of trade reforms on plant level markups using a panel data for the period 1998-99 to 2007-08. Accounting for plant level heterogeneity in terms of productivity levels and pricing behaviour, this paper finds evidence of fall in markups due reduction in input and output tariffs. Rise in imported input variety and export variety are found to have exerted a positive impact on markups.
Economic and Political Weekly, 2004
This study presents disaggregated estimates of the levels of intra-industry trade in the Indian m... more This study presents disaggregated estimates of the levels of intra-industry trade in the Indian manufacturing sector. The analysis reveals significant growth of such trade in a large number of industries during the post-liberalisation period. Thus, the argument that trade liberalisation would lead to the demise of India's domestic industries, is, for the most part, untenable.
The present study attempts a quantitative assessment of the impact of recently signed ASEAN-India... more The present study attempts a quantitative assessment of the impact of recently signed ASEAN-India FTA (AIFTA) for selected plantation commodities (coffee, tea and pepper) in India. Partial equilibrium modeling approach (SMART model and gravity model) is used to simulate the likely import increase of the plantation commodities under the proposed tariff reduction schedule of the AIFTA.
Is it in the interest of a country to promote strong local linkages for domestic industries or to... more Is it in the interest of a country to promote strong local linkages for domestic industries or to participate in global production sharing (GPS) activities wherein linkages are globally dispersed? This paper informs this debate by empirically analyzing which one of these strategies would result in higher levels of domestic value added (DVA) and employment in a developing country, India. A higher level of participation in GPS entails that, for any given country, DVA per unit of exports is smaller than when most inputs are sourced locally. However, owing to the scale and productivity effects of producing for the world market, participation in GPS can lead to higher absolute levels of DVA and domestic job creation. We test this hypothesis using a unique panel data on DVA and jobs tied to Indian exports from 112 sectors for the period 1999-2013. Our regression analysis confirms that participation in GPS, as measured by the sectoral ratio of DVA to gross exports, leads to higher absolute...
Using Input-Output (IO) analysis, this study provides the time series estimates of domestic value... more Using Input-Output (IO) analysis, this study provides the time series estimates of domestic value added (DVA) content of India's merchandise and services exports for the period 1999-2000 to 2012-13 and for 112 sectors. The study makes use of the official input-output tables (IOTs) for the benchmark years 1998-99, 2003-04, 2007-08 as well as the recently published Supply Use Tables (SUTs) for the years 2011-12 and 2012-13. The IOTs and SUTs, compiled by the CSO, do not distinguish imported inputs from domestic inputs. Using a proportionality assumption we separate domestic and imported inputs. Further, for the intervening years (i.e., the years for which IOTs and SUTs are not available), we construct the domestic use tables by making use of detailed production and trade data from various official sources. This enables us to make use of year-specific domestic use tables in our estimation. The estimates show that the DVA content of India's exports increased from US$46 billion i...
India's trade and investment regime was one of the most restrictive in the world, during the ... more India's trade and investment regime was one of the most restrictive in the world, during the long spell of import substitution since the mid 1950s, due to the very complex nature and the wide number of tools used as policy instruments. Disillusioned with the import substitution policy, a process of reorientation of the policy framework began in the early 1980s in India, which gained momentum during the 1990s. The policy reforms during the 1980s focussed more on domestic industrial liberalisation while import liberalisation was more selective. The policy of a total ban on the imports of manufactured consumer goods continued as well as the requirement of obtaining license to import most items of capital goods, raw materials and intermediates. Only selected items, where domestic substitutes were not being produced, could be imported without license. Despite the reforms in the 1980s, India was indeed the most autarkic non-communist country in the world in 1991 (Joshi and Little 1996)
How does trade liberalization impact productivity at the micro level in the economy? Using a pane... more How does trade liberalization impact productivity at the micro level in the economy? Using a panel data of Indian manufacturing plants for the period 1998-99 to 2007-08 this study examines the mechanisms through which trade impacts productivity growth at the production level in the economy. These mechanisms include trade induced pro-competitive effect, technological spillovers and import & export variety growth. We use two estimation techniques and find significant impact of these mechanisms in driving plant level productivity growth. Our study also looks into the role of various plant level characteristics (like plant age, skill intensity & contract labour ratio) and state level institutional factors in influencing these micro level productivity gains.
Increased participation of women in productive employment is a prerequisite for achieving gender ... more Increased participation of women in productive employment is a prerequisite for achieving gender equality and other sustainable development goals. Yet, female labour force participation in India, a country home to about 17 of the world's women, is abysmally low. Against this background, using plant level data, we obtain gender-wise estimates of job dynamics - job creation, destruction and reallocation - across 32 Indian states and Union Territories and 58 formal manufacturing industries for 1998-99 to 2014-15. This paper departs from earlier studies by focusing on measures of job dynamics, as opposed to static net employment measures, and on the demand side determinants of employment outcomes. We analyse whether industry-level changes in export competitiveness, mediated through exchange rate fluctuations, explain the variation in job dynamics for each gender group. We also examine whether this relationship is conditional on state level variation in labour market conditions. Our ...
Journal of Income & Wealth, 2016
The question of state-level trade performance has assumed significance in India with subnational ... more The question of state-level trade performance has assumed significance in India with subnational economies increasingly becoming responsible to deliver growth. Although several state governments have been implementing various schemes to promote exports, the central government launched a new scheme in 2002 known as Assistance to States for Developing Export Infrastructure and Allied Activities, the working of which is critically based on information pertaining to a state's export performance. A major handicap faced while analysing trade performance of states is the availability of data. Attempts have been made to construct state-wise exports using data of Directorate General of Commercial Intelligence and Statistics (DGCI&S), captured from shipping bills filed by exporters. However, state-wise import data are not provided by DGCI&S. The schedule of Annual Survey of Industries (ASI) administered by the Central Statistics Office for collecting industrial statistics at the factory l...
Should India's export promotion policies be targeted at accelerating export growth at the ext... more Should India's export promotion policies be targeted at accelerating export growth at the extensive (new trading relationships) or at the intensive margin (increase in trade of existing relationships)? To help answer this question, we undertake a comparative study of exports from India and China by analysing the role of extensive and intensive margins in the export market penetration of the two countries during 1995-2011. We further decompose intensive margin into quantity and price margins. As far as extensive margin is concerned, our results show that the gap between the two countries is getting narrower as India is clearly catching up with China. By contrast, India lags significantly behind China in terms of intensive margin due to an abysmally low and stagnant quantity margin. Intensification, rather than diversification, has been the crucial driving force of China's export success. India's exports of capital-intensive products performed better compared to labour int...
This paper analyses the dynamics and determinants of fragmentation trade in major Asian countries... more This paper analyses the dynamics and determinants of fragmentation trade in major Asian countries in comparative and long term (1962-2018) perspective. Based on the available literature, we identify certain product categories, referred to as "network products" (NP), where trade flows based on international fragmentation of production processes are most prevalent. Our analysis shows that Asian countries entered the market for NP exports in a sequential manner. The pattern of entry, rise, survival, and relative decline of countries in this market is consistent with the "wild-geese flying pattern". The first Asian country to enter the export market for NP was Japan - the lead goose - followed by a number of East and Southeast Asian countries. The export market participation of these countries, over the years, depicts a clear "inverted V" pattern. At this point in time, Japan, Hong Kong, Malaysia and Korea are on the declining part of the inverted V-curve w...
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Conference Presentations by C. Veeramani
Papers by C. Veeramani