The unequal effect of India's industrial liberalization on firms' decision to innovate: Do business conditions matter?

M. Bas () and Caroline Paunov
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M. Bas: Sciences Po and CEPII

No 2014-044, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper examines the heterogeneous impact of industrial liberalization policy, the dismantling of the License Raj in India, on firms innovation performance. Our results show that larger and more productive firms in liberalized industries were more likely to take up RD while the smallest and least efficient firms were less likely to do so. We also show that this inequality of effects was strongest in economically less developed Indian states and where financial development and the knowledge base are weaker. This suggests business conditions shape heterogeneous impacts of liberalization policies to the advantage of initially larger and more efficient firms.

Keywords: Industrial policy; Innovation policy; India; Industrial performance; Firm behavior; R&D; Research and development; Innovation. (search for similar items in EconPapers)
JEL-codes: D22 O14 O25 O31 (search for similar items in EconPapers)
Date: 2014-04-30
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino, nep-knm and nep-tid
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Unequal Effect of India's Industrial Liberalization on Firms’ Decision to Innovate: Do Business Conditions Matter? (2018)
Working Paper: The Unequal Effect of India's Industrial Liberalization on Firms’ Decision to Innovate: Do Business Conditions Matter? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2014044

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