India’s Services Sector Growth: The Impact of Services Trade on Non-tradable Services

Besart Avdiu, Karan Singh Bagavathinathan, Ritam Chaurey and Gaurav Nayyar
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Besart Avdiu: World Bank
Karan Singh Bagavathinathan: The University of Göttingen
Ritam Chaurey: Johns Hopkins University
Gaurav Nayyar: World Bank

No 142, NCAER Working Papers from National Council of Applied Economic Research

Abstract: This paper examines the effect of tradable services growth on non-tradable services acrossIndian districts. We use a shift-share “Bartik-type†instrumental variable, that relies on changes in foreign demand shocks for tradable services, weighted by the initial district employment shares in tradable services. Using multiple rounds of the Indian Economic Censuses, we find that an increase in tradable services employment leads to an increase in non-tradable services employment and increases the number of firms in non-tradable services. Our evidence suggests that this positive impact is due to an increase in consumer demand for local non-tradable services that results from the growth in tradable services employment, and not due to sectoral linkages between tradable and non-tradable services sectors. The employment impact is much larger for female workers compared to male workers, and for the number of female-owned firms relative to male-owned firms. Further, the employment impact is only significant for small non-tradable service firms.

Keywords: : Service sector; Employment; Female Employment (search for similar items in EconPapers)
JEL-codes: O1 O14 O19 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2022-05-03
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Persistent link: https://EconPapers.repec.org/RePEc:nca:ncaerw:142

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