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Foreign Shareholding and Productivity Spillover:
A Firm-Level Analysis of Indian Manufacturing
--Pritish Kumar Sahu and Sakiru Adebola Solarin
The study largely attempts to examine the spillover from Foreign Direct Investment (FDI) in Indian manufacturing by using the firm-level data for the period 2000-2009. With the use of Cobb-Douglas-type production function, it is observed that for the entire manufacturing sector, the impact of FDI on output growth is positive and significant. The result indicates that the increase in foreign equity at firm level and at sector level directly affects the productivity growth of the firm. However this does not hold true when analyzed at sector level. The paper also attempts to find the possible reason for positive spillover by analyzing some more factors of the present dataset.
© 2013 IUP. All Rights Reserved.
Oil Discovery and Sectoral Performance in Nigeria:
An Appraisal of the Dutch Disease
--Ismail O Fasanya, Adegbemi B O Onakoya and Misbaudeen A Adabanija
This study examines the effect of oil discovery on sectoral performance in Nigeria, using the time series data from 1975 to 2010. The empirical analysis rests on the Dutch Disease (DD) hypothesis and also combines several procedures in modern econometric estimation techniques. The findings show that oil discovery in Nigeria affects both the agricultural and industrial sectors. However, the effect on the agricultural sector is larger than that on the industrial sector, thus, confirming the existence of DD in Nigeria. The study therefore recommends that the government should give priority to the agricultural sector through the provision of infrastructures, incentives in the form of subsidies, and general modernization of agricultural activities.
© 2013 IUP. All Rights Reserved.
Relative Prices, Price Level and Inflation:
Effects of Asymmetric and Sticky Adjustment
--Shruti Tripathi and Ashima Goyal
The paper examines how relative price shocks can affect the price level and then inflation. Using Indian data, it is observed that: (1) Price increases exceed price decreases. Aggregate inflation depends on the distribution of relative price changes—inflation rises when the distribution is skewed to the right; (2) Such distribution- based measures of supply shocks perform better than the traditional measures, such as prices of energy and food. They moderate the price puzzle, whereby a rise in policy rates increases inflation, are significant in estimations of New Keynesian aggregate supply, and show the Indian aggregate supply curve to be flat, but subject to shifts; (3) An average Indian firm changes prices about once in a year. The estimated Calvo parameter implies that half of the Indian firms reset their prices in any period, while 66% of firms are forward looking in their price setting. These estimated real and nominal price rigidities imply policy needs to anchor inflationary expectations in response to supply shocks, but policy responses must be moderate.
© 2013 IUP. All Rights Reserved.
Trade Liberalization and Poverty: An Indian Perspective
--N A Khan and Santanu Chowdhury
This study examines the effect of trade liberalization on poverty in India through regression analysis by using data for the period from 1980-81 to 2007-08. In 1991, India adopted trade reform policy to overcome the balance of payment crisis and achieve a stable and sustainable development. After trade reform, the growth rate of output increased significantly, inflation rate declined, foreign exchange reserves rose substantially and there was a sharp reduction in poverty. This study analyzes the changing characteristics of national, rural and urban poverty measured in terms of Head Count Ratio (HCR) and absolute poverty. It also focuses on the per capita income generated from exports of products of various sectors as the driving force for poverty reduction at national and state level. It tries to build a linkage between export orientation of India and poverty.
© 2013 IUP. All Rights Reserved.
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