International Competitiveness, Investment and Finance: A Case Study of India (Routledge Studies in Development Economics, 33)

Using India as a case study, this well-written, concise book covers everything one needs to know to understand how a country becomes internationally competitive. Showing that reforms that pertain to the real sector alone, such as industrial deregulation and trade reforms, are not enough to enhance a country's competitiveness, this book makes a compelling case for complimentary financial sector reforms. Of interest to academics studying international trade, industrial economics and development economics, this book is also guaranteed to be extremely useful for professional economists and those involved with policy making in developed and developing countries. Book Cover......Page 1 Half-Title......Page 2 Title......Page 6 Copyright......Page 7 Dedication......Page 8 Contents......Page 9 Figures......Page 11 Tables......Page 12 Preface......Page 14 1 Competitiveness, investment and finance......Page 15 Investment and sectoral competitiveness......Page 17 Exporting behaviour at the firm level......Page 18 Investment and finance......Page 19 1.2 India as a case study......Page 20 1.3 Organisation of the book......Page 21 2.1 Macroeconomic policy......Page 23 2.2 Trade policy......Page 24 2.3 Exchange rate policy......Page 25 2.4 Industrial policy......Page 26 2.5 Financial sector policy......Page 27 Non-bank financial institutions......Page 28 Capital markets......Page 29 2.7 Exit policy......Page 30 2.8 An assessment......Page 32 3 The balance of payments and national competitiveness......Page 34 3.1 The evolution of the external sector......Page 35 The theory of BOP-constrained growth......Page 37 An extension: remittance income......Page 40 The estimation procedure......Page 41 Results......Page 42 3.3 Trends and patterns in aggregate competitiveness......Page 44 Commodity composition......Page 46 Market distribution......Page 53 3.4 Concluding remarks......Page 54 4.1 The analytical framework......Page 56 Data and period of analysis......Page 57 Variable construction......Page 58 4.4 Productivity and the price determinants of international competitiveness......Page 59 4.5 Regression results......Page 61 4.6 Concluding remarks......Page 64 5 Outward orientation......Page 66 5.1 A review of the literature on firm-level exporting behaviour in India......Page 67 5.2 Modelling a firm’s decision to export......Page 69 Choice of export variable......Page 71 5.4 Industry characteristics......Page 72 5.5 The characteristics of exporting firms......Page 76 Persistence of exporting......Page 79 5.6 The lumpiness of investment......Page 83 The empirical specification......Page 85 Results......Page 87 5.8 Concluding remarks......Page 89 6.1 Theories of asymmetric information and finance constraints......Page 92 Investment function specification—theoretical and empirical issues......Page 93 6.2 Testing for the source of the finance constraint......Page 96 6.3 The sources of funds for Indian firms— patterns and trends......Page 98 6.4 Empirical results......Page 99 The presence of finance constraints......Page 101 Sources of finance constraints......Page 102 6.5 Concluding remarks......Page 108 7 Conclusions and policy implications......Page 110 Appendix......Page 115 Notes......Page 137 References......Page 141 Index......Page 146