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From Licence Raj to Market Forces: The Determinants of Industrial Structure in India after Reform

Kwok Tong Soo
Economica
New Series, Vol. 75, No. 298 (May, 2008), pp. 222-243
Stable URL: http://www.jstor.org/stable/40071747
Page Count: 22
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From Licence Raj to Market Forces: The Determinants of Industrial Structure in India after Reform
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Abstract

This paper explores the relationship between factor endowments, technology and industrial structure, using a panel data-set of Indian industries across states, industries and time. Factor endowments and technology are found to be significantly related to industry shares, and this is robust to controlling for the slow adjustment of industrial structure. I also consider the impact of the liberalization of the Indian economy beginning in 1985 and 1991 on the relationship between these variables. While industrial structure is always positively related to technological advantage, factor endowments play an increasingly significant role after liberalization.

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