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Abstract

The paper follows a methodology where exports are seen as the endogenous outcome of cost reduction practices in the domestic economy characterized by greater industrial differentiation and specialization; it is this competitiveness in the domestic environment that guides exports and induces the support bases such as infrastructure, human capital formation, R&D, etc., not the other way around. On the other hand, the actual behaviours of Indian manufacturing exports (and productivity growth) could be seen as mere (passive) adjustments to demand conditions created by liberalization of trade (exchange rate adjustments), which shifts the focus to an analysis of as to why big corporate firms, despite evidence of periodic productivity growth, could not sustain exports growth (and productivity growth). The focus then is on the nature of productivity growth. Lack of exports could be due to the fact that the observed productivity growth in India could be a reflection of increasing returns to scale phenomenon that (i) takes place with given technology (and endowments, preferences, etc., remain the same) and (ii) could be associated with higher market power, reducing export competitiveness.

Keywords

Exports productivity growth division of labour

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Manufacturing Exports and Policy Formulations

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