Trade Liberalization and Indian Manufacturing MSMEs: Role of Firm Characteristics and Channel of Liberalization
We examine the impact of tarif and non-tarif reductions on frm-level gross value of output (GVO) and productivity for various types of Indian manufacturing MSMEs for the 2002–2007 period. We merge the 3rd (2001–2002) and 4th (2006–2007) All India Census data on Indian MSMEs to create a novel dataset that includes microenterprises and to calculate input and fnal goods tarifs, ERPs and NTBs for broad product groups using information from India’s export–import policy, 1997–2003 and 2004–2009. After controlling for frm, industry, state and time-specifc factors, we fnd tarif reductions have improved frm-level GVO and productivity for MSMEs which are technologically upgraded and quality certifed. Further, the efects of input tarif reduction exceed those from fnal goods tarif reductions, i.e., the input sourcing channel is stronger than the fnal product competition channel. Liberalization of non-tarif barriers is found to have a positive efect on both GVO and productivity growth.
Trade Liberalization and Indian Manufacturing MSMEs: Role of Firm Characteristics and Channel of Liberalization
We examine the impact of tarif and non-tarif reductions on frm-level gross value of output (GVO) and productivity for various types of Indian manufacturing MSMEs for the 2002–2007 period. We merge the 3rd (2001–2002) and 4th (2006–2007) All India Census data on Indian MSMEs to create a novel dataset that includes microenterprises and to calculate input and fnal goods tarifs, ERPs and NTBs for broad product groups using information from India’s export–import policy, 1997–2003 and 2004–2009. After controlling for frm, industry, state and time-specifc factors, we fnd tarif reductions have improved frm-level GVO and productivity for MSMEs which are technologically upgraded and quality certifed. Further, the efects of input tarif reduction exceed those from fnal goods tarif reductions, i.e., the input sourcing channel is stronger than the fnal product competition channel. Liberalization of non-tarif barriers is found to have a positive efect on both GVO and productivity growth.
