Trade Liberalisation and Productivity Growth in Manufacturing

Using panel data comprising firm-level information drawn from groups within manufacturing industry which have experienced the most significant tariff reduction, this study investigates the trend in productivity growth since 1988-89. The sample of 2,300 firms and 11,009 observations, spanning the period 1988-89 to 1997-98 is very likely the largest assembled for the purpose thus far. We find no evidence of acceleration in productivity growth since the onset of reforms in 1991-92. The result is evaluated in relation to the changes till date in the policy regime in the Indian economy.