Trade Liberalization and the Efficiency of Firms in Indian Manufacturing

Nigel Driffield and Uma Kambhampati

Review of Development Economics, 2003, vol. 7, issue 3, 419-430

Abstract: Has the efficiency of firms in India improved since its liberalization in 1991? The authors attempt to answer this question by analyzing the determinants of firm‐level efficiency in six manufacturing sectors in India while focusing on the effects of liberalization and domestic competition. They find that there was an increase in overall efficiency in the post‐reform period in India in five out of the six sectors. While imports do not seem to improve efficiency, liberalization did increase efficiency in four of the sectors.

Date: 2003
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