Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2007:16: Is the elephant stepping on its trunk? The problem of India´s unbalanced growth

Robin Douhan () and Anders Nordberg ()
Additional contact information
Robin Douhan: The Research Institute of Industrial Economics, Postal: Box 665501, SE-102 15 Stockholm, Sweden
Anders Nordberg: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: It is often assumed that recent success in the high-technology software industry will lead India’s development. However, evidence suggests that basic manufacturing industry is stagnant. This paper proposes a mechanism that ties these two trends together. A big-push type of model, featuring linkages between firms, demand spill-over, and technology choice is elaborated. By imposing di¤erent cost structures on the manufacturing and high-technology industries the model describes outcome in terms of distribution between sectors. It is found that a policy promoting a high-technology sector can have negative effects on the manufacturing industry as well as aggregate income. A policy directing resources towards infrastructure benefits all sectors and increases aggregate income. The results from the model are found to correpond with the recent development pattern in India.

Keywords: Industrialization; India; Industrial structure

JEL-codes: L16; O14; O25

33 pages, June 1, 2007

Full text files

FULLTEXT01.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Ulrika Öjdeby ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:uunewp:2007_016This page generated on 2024-09-13 22:17:37.