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Entry Liberalization and Inequality in Industrial Performance
Abstract
Industrial delicensing, which began in 1985 in India marked a discrete break from a past of centrally planned industrial development.Similar liberalization episodes are taking place across the globe.We develop a simple Schumpeterian growth model to understand how firms respond to the entry threat imposed by liberalization.The model emphasizes that firm responses, even within the same industrial sector, are likely to be heterogeneous leading to an increase in within industry inequality.Technologically advanced firms and those located in regions with pro-business institutions are more likely to respond to the threat of entry by investing in new technologies and production processes.Empirical analysis using a panel of three-digit stateindustry data from India for the period 1980-1997 confirms that delicensing led to an increase in within industry inequality in industrial performance.
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Citations
Cited by
Hausmann, R., Hwang, J., & Rodrik, D. (2007) · Journal of Economic Growth · doi:10.1007/s10887-006-9009-4 · Cited by 2,333
Hausmann, R., Hwang, J., & Rodrik, D. (2005) · SSRN Electronic Journal · doi:10.2139/ssrn.896243 · Cited by 579
Distributional Effects of Globalization in Developing Countries
Goldberg, P. K., & Pavcnik, N. (2007) · Journal of Economic Literature · doi:10.1257/jel.45.1.39 · Cited by 539
Metadata
- Authors
- Aghion, P., Burgess, R., Redding, S., & Zilibotti, F.
- Venue
- Journal of the European Economic Association
- Publisher
- Oxford University Press (OUP)
- Published
- 2005-04-01
- Volume
- 3
- Issue
- 2
- Pages
- 291-302
- ISSN
- 1542-4766 (ISSN-L)
- 1542-4774
- OpenAlex
- W3122439665
- Cited by
- 168
- References
- 0
- FWCI
- 37.97
- Type
- journal article
- Language
- en
- Open access
- closed
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- Aghion, P., Burgess, R., Redding, S., & Zilibotti, F. (2005). Entry Liberalization and Inequality in Industrial Performance. Journal of the European Economic Association. https://doi.org/10.1162/1542476054472973
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