An Evaluation of Indian Manufacturing Exports Performance
| Published date | 01 February 2015 |
| DOI | 10.1177/0015732514558141 |
| Date | 01 February 2015 |
| Subject Matter | Commentaries |
An Evaluation of Indian
Manufacturing Exports
Performance
Satya Prasad Padhi1
Abstract
The article, following Young (1928), maintains that the incentives to the growth
of firms that is based on providing incentives for further scope of division of
labour and narrow specializations in intermediate goods is the best way to pro-
mote exports, which would be associated with greater dynamism of the manu-
facturing sector. It adopts an empirical framework to highlight the conditions
that indicate such incidence of dynamism, which could permit both higher wages
to more skilled labour force and higher returns to the firms. It shows that there
is a slowing down of such dynamism, which can explain the decreasing share of
manufacturing exports to total exports in recent times, which is also an indicator
of lack of greater dynamism of the manufacturing sector.
JEL: F1, L22, O14, O3
Keywords
Manufacturing exports, division of labour, external economies
The purpose of the article is to evaluate the post-reform performance of the
Indian manufacturing sector in terms of its impact on exports. A particular
emphasis is on the hypothesis that the growth performance of manufacturing
exports with an increasing share of manufacturing exports in total exports is an
important condition that would reflect a sophisticated manufacturing base in
India. This particular hypothesis draws its strength from some stylized facts of
growth that show that the export performance in relation to import intensity
defines the developed status of the developed countries (for various interpreta-
tions, see Krugman, 1989; McCombie & Thirlwall, 1996). However, impor-
tantly, as Dean and Sebastia-Barriel (2004) noted, one of the features of high
growth phase is that the growth in world trade outpaces the growth of world
output and the developed status of the countries indicates that in such cases an
Commentary
Foreign Trade Review
50(1) 41–52
©2015 Indian Institute of
Foreign Trade
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0015732514558141
http://ftr.sagepub.com
Corresponding author:
Satya Prasad Padhi, Associate Professor, Department of Economics, Panjab University, Chandigarh
160014, India.
Email: litton_padhi@yahoo.com
1 Department of Economics, Panjab University, Chandigarh, India.
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