Working Paper: NBER ID: w19923
Authors: Rajeev H. Dehejia; Arvind Panagariya
Abstract: The impact of trade liberalization on manufacturing growth has been widely studied in the literature. What has gone unappreciated is that accelerated manufacturing growth has also been accompanied by accelerated services growth. Using firm-level data from India, we find a positive spillover from manufacturing growth to gross value added, wages, employment, and worker productivity in services, especially large urban firms and in service sectors whose output is used as a manufacturing input.
Keywords: Manufacturing; Services Growth; Trade Liberalization; India
JEL Codes: O14; P21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| manufacturing growth (L60) | services growth (L84) |
| manufacturing growth (L60) | capital-intensive services growth (O14) |
| services growth (L84) | manufacturing growth (L60) |
| manufacturing growth (L60) | services growth (L84) |
| labor regulations (J88) | manufacturing growth (L60) |