Template-type: ReDif-Paper 1.0
Author-Name: Bas M. 
Author-Name: Paunov C. 
Author-workplace-name: UNU-MERIT
Title: The unequal effect of India's industrial liberalization on firms' decision to innovate: Do business conditions matter?
Abstract: This paper examines the heterogeneous impact of industrial  liberalization policy, the dismantling of the License Raj in India, on  firms innovation performance. Our results show that larger and more  productive firms in liberalized industries were more likely to take up  RD while the smallest and least efficient firms were less likely to do  so. We also show that this inequality of effects was strongest in  economically less developed Indian states and where financial  development and the knowledge base are weaker. This suggests business  conditions shape heterogeneous impacts of liberalization policies to the  advantage of initially larger and more efficient firms.
Keywords: Firm Behavior: Empirical Analysis; Industrialization; Manufacturing and Service Industries; Choice of Technology; Industrial Policy; Innovation and Invention: Processes and Incentives; 
Classification-JEL: O25; O14; O31; D22; .
Series:  Working Papers
Creation-Date: 2014
Number: 044
File-URL: http://pub.maastrichtuniversity.nl/9dcf1664-856c-4be1-a987-d819b7a016b9
File-Format: application/pdf
File-Size: 387966
Handle: RePEc:unm:unumer:2014044