Profitability or Industrial Relations: What Explains Manufacturing Performance across Indian States?

Anirban Karak and Deepankar Basu

Development and Change, 2020, vol. 51, issue 3, 817-842

Abstract: This article begins with a critique of the well‐known claim by Besley and Burgess concerning the negative impact of labour regulation on organized sector manufacturing performance in India. In the second part of the article, the authors use a state‐level panel data set for the period 1969–2005 to analyse the relative importance of profitability (rate of profit as a percentage of the total replacement cost of capital stock) and industrial disputes (man‐days lost to all industrial disputes as a percentage of total workers employed) to explain cross‐state variations of manufacturing performance in India's organized sector. Using three different measures of manufacturing performance — net value added, investment and employment — they find that profitability is more significant than industrial disputes in explaining the variation of manufacturing sector performance across Indian states. The findings presented here therefore question the uncritical acceptance of Besley and Burgess's results in the literature on labour regulation.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.1111/dech.12493

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:devchg:v:51:y:2020:i:3:p:817-842

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0012-155X

Access Statistics for this article

More articles in Development and Change from International Institute of Social Studies
Bibliographic data for series maintained by Wiley Content Delivery ().