J-Curve of Productivity and Growth: Indian Manufacturing Post-Liberalization

Arvind Virmani and Danish Hashim

No 2011/163, IMF Working Papers from International Monetary Fund

Abstract: Most estimates of Indian manufacturing productivity find a slowdown in the 1990s. This has puzzled analysts, given that 1990s reforms were deeper and wider than the 1980s reforms that raised the growth rate of the Indian economy by 2 per cent points. This paper tests the hypothesis of the J curve of Productivity and Growth following major liberalization and finds it to be broadly supported by the data: Technological obsolescence, gradual adoption of new technology and learning by doing result in negative effects on measured productivity.

Keywords: WP; productivity growth; capital goods; capital stock; fixed capital; output growth; petroleum refinery; private sector; technology-productivity incentive; Indian manufacturing; Economic reforms; productivity & output growth; J-curve hypothesis; petroleum refinery industry; industry composition; productivity differential; productivity spurt; aggregate manufacturing; productivity slowdown; plastic product; productivity-enhancing effect; services productivity; cotton textiles consumer products; petroleum product; Productivity; Production growth; Manufacturing; Total factor productivity; Global (search for similar items in EconPapers)
Pages: 34
Date: 2011-07-01
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Citations: View citations in EconPapers (12)

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