Impact of Liberalization on Indian Firms—Some Issues

Mausumi Kar ()
Additional contact information
Mausumi Kar: Women’s Christian College, University of Calcutta

Chapter Chapter 3 in The Indian Textile and Clothing Industry, 2015, pp 35-68 from Springer

Abstract: Abstract This chapter incorporates the resultant implications of the withdrawal of MFA quota on the firm level activity and the industry level output and employment in addition to describing the significant changes brought about in the structure of the textile and clothing Industry of India. The first section, with the help of an analytical structure and its supporting empirical observations, shows the importance of expenditure on sales promotion and marketing activities in enhancing the penetration capacity of the domestic industry in the unleashed global market. The second section of the chapter shows that the industry, since the withdrawal of quota, has witnessed unprecedented concentration of firm level activities not only by size of operation but also by specific regions or states within the country, thereby creating some sort of inequality. Relating trade and labor market outcomes, the firm-level empirical estimates show that the export-oriented firms in India were not affected adversely and that the aggregate wage bill also rose during this period. The firm-level panel is supplemented by a state-level panel to capture the more aggregative impact of the withdrawal of MFA on the level of labor earnings in various regions of India. It is inferred that the aggregate state level wage bill falls as the profit level rises for the industry. The results also show that regional wage disparity has strong relation with regional disparity in firm-concentration at the level of the industry.

Keywords: Sales promotion expenditure; Cost; Trade policy; MFA-quota; Concentration of firms; Employment; Wage; Inequality (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:spbchp:978-81-322-2370-2_3

Ordering information: This item can be ordered from
http://www.springer.com/9788132223702

DOI: 10.1007/978-81-322-2370-2_3

Access Statistics for this chapter

More chapters in SpringerBriefs in Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().