Multiplying multi-plants: A new and consequential phenomenon

Abhishek Anand, Arvind Subramanian and Naveen Thomas

Journal of Development Economics, 2025, vol. 174, issue C

Abstract: Nearly all the literature using the Annual Survey of Industries (ASI) data in India has overlooked or not seriously incorporated the phenomenon of multi-plants, whereby a firm sets up multiple production facilities within a state. We show that multi-plants have grown dramatically over time, now accounting for 36 percent of employment in large firms (greater than 200 workers). The multi-plant phenomenon is important because it changes our understanding of the evolution of the size of large firms: contrary to recent research we find that accounting for multi-plants shows that large plants have not grown in size (and may even have shrunk) despite increasing recourse to contract labour. More broadly, any literature that focusses on firm size distribution without accounting for the multi-plant phenomenon is prone to measurement error.

Keywords: Plant size distribution; Multi-plants; Productivity; Regulatory risk (search for similar items in EconPapers)
JEL-codes: D21 D24 J21 J41 L2 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:174:y:2025:i:c:s0304387825000069

DOI: 10.1016/j.jdeveco.2025.103455

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