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on Central and Western Asia |
| By: | Sumon Kumar Bhaumik (Brunel University and IZA Bonn); Shubhashis Gangopadhyay (India Development Foundation); Shagun Krishnan (India Development Foundation) |
| Abstract: | It is now stylized that, while the impact of ownership on firm productivity is unclear, product market competition can be expected to have a positive impact on productivity, thereby making entry (or contestability of markets) desirable. Traditional research in the context of entry has explored the strategic reactions of incumbent firms when threatened by the possibility of entry. However, following De Soto (1989), there has been increasing emphasis on regulatory and institutional factors governing entry rates, especially in the context of developing countries. Using 3-digit industry level data from India, for the 1984-97 period, we examine the phenomenon of entry in the Indian context. Our empirical results suggest that during the 1980s industry level factors largely explained variations in entry rates, but that, following the economic federalism brought about by the post-1991 reforms, variations entry rates during the 1990s were explained largely by state level institutional and legacy factors. We also find evidence to suggest that, in India, entry rates were positively associated with growth in total factor productivity. |
| Keywords: | entry, productivity, institutions, regulations, India, reforms |
| JEL: | L11 L52 L64 L67 O14 O17 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2086&r=cwa |
| By: | D ' Costa, Anthony P. |
| Abstract: | The success of the Indian software industry is now internationally recognized. Consequently, scholars, policymakers, and indus try officials everywhere generally anticipate the increasing competitiveness of India in high technology activities. Using a structural framework, the author argues that Bangalore ' s (and India ' s) information technology (IT) industry is predicated on an Indian business model which does not encourage thick institutional linkages such as those encapsulated by the triple helix model. Under this institutional arrangement there is cross-fertilization of new ideas and new modes of institutional interaction between industry, academia, and government. Though there are several hundred IT businesses in a milieu of numerous engineering and science colleges and high-end public sector research institutes, the supposed thick institutional architecture is in reality quite thin. This is due to a particular type of an export-oriented model which is based on off-shore development of software services, targeted mainly to the United States. Neither domestic market nor non-U.S. markets such as East Asia are pursued aggressively by Indian firms, which offer alternative forms of learning. Consequently, Bangalore ' s dynamism in the IT industry stems from linear and extensive growth rather than nonlinear and intensive growth. The author argues that Bangalore has serious innovation challenges with weak university-industry linkages, lack of inter-firm collaboration, and the absence of cross-fertilization between the knowledge-intensive defense/public sector and the commercial IT industry. To strengthen Bangalore ' s and India ' s innovation system, the Indian business model must be reformed by diversifying geographical and product markets, stemming international and internal brain drain, and contributing to urban infrastructure. |
| Keywords: | ICT Policy and Strategies,Technology Industry,Tertiary Education,Information Techno logy,Educational Technology and Distance Education |
| Date: | 2006–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3887&r=cwa |
| By: | Siddhartha G. Dastidar; Raymound Fisman; Tarun Khanna |
| Abstract: | We examine the effect of regime change on privatization using the 2004 election surprise in India. In that election, the pro-reform BJP was un-expectedly defeated by a less reformist coalition. Government controlled companies that were being studied for complete privatization by the BJP dropped by 7.5 percent relative to private firms. By contrast, government controlled firms that were not being considered for privatization, or firms that had already been fully privatized firms, did not experience significant drop relative to private firms. Firms that the BJP had slated for definite future privatization experienced intermediate declines of approximately 3.5 percent. We interpret this as evidence consistent with investor belief of policy irreversibility in privatization, where reforms may reach a 'point of no return' beyond which future regimes have difficulty reversing those policies. Taking advantage of an 'intermediate' event where policies were expected to be more heavily influenced by the communist party, we still find evidence consistent with policy irreversibility. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d05-158&r=cwa |
| By: | Bhat Ramesh; Jain Nishant |
| Abstract: | This paper analyses financial performance of corporate hospitals in India. While studying the financial performance of hospitals in our previous work we observed that there are some distinct differences between unlisted and listed hospitals. It is hypothesised that corporate hospitals which are listed on the stock exchanges are likely to be more aware about corporate governance issues and ensure better utilisation of resources and meet expectation of various stakeholders. We study the differences in listed and unlisted hospitals in this paper. The findings suggest that operating cost ratio of listed hospitals is significantly different and lower from the unlisted hospitals. We also find that borrowings of unlisted hospitals are much higher than listed hospitals because they have no access to capital markets to raise money. This increase the financial vulnerability of unlisted hospitals as their ability to service the debt is low. We discuss the implications of these results. |
| Date: | 2006–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2006-03-07&r=cwa |
| By: | Bhandari, Amit (University of Kalyani); Heshmati, Almas (Ratio) |
| Abstract: | Since the early 1990s, the employment structure of organised manufacturing industries in India has undergone substantial changes with the steep rise in the use of contract workers in place of permanent workers. This process has led to increased wage inequality, discrimination as well as the concern of job insecurity in the labour market. We focus on the wage inequality between permanent and contract workers, since contract workers earn substantially lower wages than their counterpart. The study uses data at the individual level from a recent labour survey of organised manufacturing industries in India. The lower wage earned by contract worker is largely due to cost cutting, rather than differences in labour productivity. The issue of job insecurity has been modeled in form of a binary logistic model. The factors affecting job security are divided as productivity related attributes like level of education, skill etc. and institutional attributes such as labour market rules and regulations, union membership etc. Contrary to the general expectation the study finds that permanent workers are more concern of job insecurity than contract workers. |
| Keywords: | Job Security; Discrimination; Wages; Decomposition; Permanent and Contract Workers; Manufacturing |
| JEL: | J31 J60 J70 |
| Date: | 2006–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0088&r=cwa |
| By: | Bhat Ramesh; Jain Nishant |
| Abstract: | This paper analyses financial performance of private hospitals. The study is based on financial statement data of private hospitals for the years 1999 to 2004. Using 25 key financial ratios, the study finds six key financial dimensions. These are: fixed assets age, current assets efficiency, operating efficiency, financial structure, surplus/profit appropriation, and financial profitability/operating cost ratio. The findings suggest that over the years hospitals have shown marginal improvement in financial performance. Though the total amount of debt is not high, it is the cost of debt and ability to service the debt which is making debt burden high for hospitals. The financial risks in this sector are high because of lower profitability and lower operating efficiencies. We discuss the implications of the results. |
| Date: | 2006–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2006-04-08&r=cwa |
| By: | Mustafa Besim (Department of Banking and Finance, Eastern Mediterranean University); Glenn P. Jenkins (Department of Economics, Queen's University) |
| Abstract: | The size of the informal labour force and its contribution to the national income of North Cyprus has been an issue of considerable controversy and political significance. Because of the relatively free movement of labour between Turkey and North Cyprus, a significant body of unregistered workers have accumulated in North Cyprus. The findings are that from 1996 to 2000 the informal employment is between 35 to 40 per cent of the total labour force. Because not all the informal sectors production is excluded from the official national income statistics, the understatement of the official statistics is estimated to be between 12 to 17 percent of GNP. The fiscal losses are estimated to be about 9 percent of total tax revenues and a loss of social security revenues is approximately 38 per cent of the total annual contributions. |
| Keywords: | Cyprus, informal sector, informal labour force, fiscal losses, unrecorded income, underground economy |
| JEL: | H26 H24 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1058&r=cwa |
| By: | G. Chiesa |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:397&r=cwa |
| By: | Lopez-Garcia, Paloma |
| Abstract: | New firm entry has been fundamental for job creation in the transition economies. Hence, the urge to reform the framework in which firms operate. This paper aims to improve our understanding of the business environment of the Europe and Central Asia (ECA) countries, as well as to assess which of the institutions that shape it are most important for labor market performance. To achieve that aim, the author groups the institutions into those affecting firm entry and those affecting business survival and growth, and proceeds to construct indicators to summarize them. Next, she analyzes the impact of the business environment institutions on the employment generated by the private sector of the countries, proxied by the service employment rate. The regression analysis uses an unbalanced panel of 28 ECA countries over 14 years-from 1988 to 2002. Recent literature on the labor market performance of the OECD countries argues that what matters for employment is the interaction between institutions and shocks. Accordingly, the explanatory variables used in the regression are the interactions between the transition shock suffered by the ECA countries and each of the business environment institutions previously defined. The author finds that access to finance is the most important institution across all ECA cou ntries. The development of the financial sector can explain about 40 percent of private employment creation in the European transition economies according to the model. On the other hand, the poor access to finance in Bulgaria, Croatia, and above all, Romania, is the main factor behind their poor development of the private sector. Market regulation (credit and labor regulation), start-up costs, and the tax burden are all found to significantly affect employment as well. |
| Keywords: | Labor Markets,Economic Theory & Research,Markets and Market Access,Microfinance,Small Scale Enterprise |
| Date: | 2006–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3885&r=cwa |