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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 promote exports, which would be associated with greater dynamism of the manufacturing 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.

Keywords

Manufacturing exports division of labour external economies

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An Evaluation of Indian Manufacturing Exports Performance

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