The Case of the ‘Missing Middle’ in the Indian Manufacturing Sector: A Firm Level Analysis

2020 ◽  
Author(s):  
Sunandan Ghosh ◽  
Vinoj Abraham
Keyword(s):  
Manufacturing Sector ◽  
Firm Level ◽  
Indian Manufacturing Sector ◽  
Missing Middle ◽  
Level Analysis

scholarly journals The missing middle phenomenon in Indian manufacturing sector: myths or realities?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
P. C. Parida ◽  
Arup Mitra ◽  
Kailash Ch. Pradhan
Keyword(s):  
Design Methodology ◽  
Manufacturing Sector ◽  
Financial Indicators ◽  
Firm Level ◽  
Content Type ◽  
Level Data ◽  
Level Information ◽  
Indian Manufacturing Sector ◽  
Missing Middle ◽  
The Relationship

PurposeThis study attempts to examine the missing middle (MM) phenomena in the context of the Indian manufacturing sector using the unit level information from the database of Ministry of Corporate Affair, Government of India.Design/methodology/approachUnlike the previous studies, the present study first bifurcated the missing enterprises into two categories such as “permanently” dropped and “reappeared,” in order to pursue a meaningful analysis and derive conclusions with policy insights. Various financial indicators were used to explain the causes of MM phenomena during 2009–2010 and 2016–2017, in a logistic framework.FindingsThe study found that profit margin ratio is higher for the group of medium sized enterprises which continued in comparison to the units which dropped out permanently. Similar is the case with the ratio of investment turnover. The econometric results, however suggest that the relationship between the chances of a firm being dropped out and financial indicators is weak as the coefficients of various financial indicators are found to be statistically significant only for a few years.Originality/valueThe study suggests that the missing middle phenomenon is not a myth in India as very large number of medium-sized firms have been disappearing from the market over the years. Based on firm level data it identifies the factors which resulted in such a phenomenon.

scholarly journals DETERMINANTS OF ENERGY AND CO2 EMISSION INTENSITIES: A STUDY OF MANUFACTURING FIRMS IN INDIA

2018 ◽  
Vol 63 (02) ◽  
pp. 389-407
Author(s):  
SANTOSH K. SAHU ◽  
DEEPANJALI MEHTA
Keyword(s):  
Carbon Dioxide ◽  
Regression Analysis ◽  
Co2 Emission ◽  
Manufacturing Sector ◽  
Carbon Dioxide Emission ◽  
Business Environment ◽  
Manufacturing Firms ◽  
Primary Sources ◽  
Firm Level ◽  
Indian Manufacturing Sector

This paper investigates determinants of energy and emission intensities of manufacturing firms in India, from 2000 to 2014. Given that Indian manufacturing sector is one of the world’s most polluting sectors in terms of CO2 emissions; we arrive at firm level determinants of energy and carbon dioxide emission intensities from consumption of three primary sources of energy, namely (1) Coal, (2) Natural Gas and (3) Petroleum. The results of the regression analysis suggest that there are inter-firm differences in energy and emission intensity. The results indicate that smaller and larger firms are both energy and emission intensive compared to medium sized firms. Similarly, firms spending more in research and development activities are found to be energy and emission efficient, compare to others. Hence, in the global competitive business environment, Government of India should carefully formulate policies suitable for the medium sized firms to make them energy and emission efficient.

Pattern and Trends of Financing in the Indian Manufacturing Sector

2021 ◽  
Vol 9 (1) ◽  
pp. 105-127
Author(s):  
Pramod Sinha ◽  
Seshanwita Das
Keyword(s):  
Manufacturing Sector ◽  
Balance Sheet ◽  
External Financing ◽  
Firm Level ◽  
External Finance ◽  
Flow Of Funds ◽  
Operating Profit ◽  
Methodological Improvement ◽  
Internal Sources ◽  
Indian Manufacturing Sector

The firm’s choice to finance its asset reveals the pattern of flow of funds, the availability and reliance on sources of such funds. We study ‘Sources of fund’ statement for an unbalanced panel of nearly 3400 firms in the manufacturing sector during the financial year 2011–2018. We find that financing has been mostly met through internal sources, and the reliance on external financing has decreased during this period. We introduce a methodological improvement by studying change in total assets to understand financing. A series of empirical models was formulated to identify factors that influences external financing. The result shows that unlisted, non-exporting, new-aged and small-sized firms have higher share of external financing. Further, profitability ratios like return on asset and operating profit margin, tangibility ratio like gross fixed assets to total assets, and reserves to total assets, shows negative and significant relationship with share of external financing to total funds and external financing to total assets. Our results add the dimension that interaction of change in assets with firm specific characteristics provides a meaningful way to extend the results of existing models. We argue that while existing methods use limited balance sheet items for analyzing internal versus external finance, firm level decisions ought to include all sources of finance. JEL Classifications: D22, G30, G32

DISPERSION IN INPUT AND OUTPUT PRICES: A FIRM-LEVEL ANALYSIS

2021 ◽  
pp. 1-25
Author(s):  
SONAM CHOUDHRY
Keyword(s):  
Manufacturing Sector ◽  
Empirical Relationship ◽  
Plant Size ◽  
Firm Level ◽  
Quality Differentiation ◽  
Input And Output ◽  
Level Data ◽  
Rich Data ◽  
Level Analysis ◽  
Material Input

Analyzing representative and rich data on the Indian formal manufacturing sector, this paper tries to establish an empirical relationship between prices of input, output and firm size of the plant. The firm-level data reflect tremendous dispersion in prices that firms pay to purchase material input even within an industry. Price heterogeneity is also observed for prices that firms charge for their output even for narrowly defined products. The paper constructs a model using information on output and input choices by firms to analyze the observed patterns. The paper finds that on average, bigger plants not only pay a premium for the inputs used in the production process, but also charge a premium for their outputs. After documenting the empirical relationship, the paper discusses the possible sources for price dispersion. The paper highlights sectoral variations in the correlation between plant size and prices, which are consistent with the findings in the literature related to the scope for quality differentiation in output as well as inputs. The empirical pattern observed supports the hypothesis that correlation between plant size and price can be driven by market power.

FDI and incumbent R&D behavior: evidence from Indian manufacturing sector

2017 ◽  
Vol 44 (3) ◽  
pp. 380-399 ◽  
Author(s):  
Qayoom Khachoo ◽  
Ruchi Sharma
Keyword(s):  
Manufacturing Sector ◽  
Empirical Studies ◽  
Foreign Firms ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Domestic Firms ◽  
Indian Manufacturing Sector ◽  
The Impact ◽  
Two Step Estimation

Purpose The study is an attempt to analyze the impact of foreign direct investment (FDI) on research and development (R&D) behavior of incumbent firms’, both domestic and foreign, operating in Indian manufacturing sector. FDI inflows into the host country escalates the level of competition compelling domestic as well as existing foreign firms to adjust their spending on R&D. The purpose of this paper is to propose that response of domestic and existing foreign firms to the FDI entry vary, with domestic firms increasing their spending on R&D whereas foreign firms reducing it. Design/methodology/approach Using a rich firm level data set from Indian manufacturing for the period 2000-2012, the study utilizes Heckman’s two- step estimation strategy to estimate the impact of FDI entry on R&D behavior of incumbents. Findings FDI entry significantly increases the tendency of domestic and foreign firms to invest in R&D; however, the impact on R&D intensity for both domestic and foreign firms appears to be minimal. Originality/value The study contributes to the existing literature on two fronts. One, unlike other studies, it examines the impact of FDI entry not only on R&D behavior of domestic firms but also on the R&D behavior of existing foreign firms. Second, it addresses the problem of selection bias that has been largely ignored by majority of empirical studies on R&D.

scholarly journals Trade Liberalization and Labor Demand Elasticities: A Firm-Level Analysis of Pakistan’s Manufacturing Sector

2021 ◽  
Vol 5 (2) ◽  
pp. 53-68
Author(s):  
Muhammad Ramzan Sheikh ◽  
Misbah Rauf ◽  
Irfan Hussain ◽  
Asad Abbas
Keyword(s):  
Panel Data ◽  
Trade Liberalization ◽  
Positive Relationship ◽  
Manufacturing Sector ◽  
Labor Demand ◽  
Demand Elasticity ◽  
Policy Recommendations ◽  
Firm Level ◽  
Demand Elasticities ◽  
Level Analysis

The study investigates the linkage of trade liberalization and labor demand elasticities in Pakistan. The panel data are used by selecting 13 industries in Pakistan's manufacturing sector for the years 1995-1996, 2000-2001, and 2005-2006. The Pooled OLS technique is applied to get the estimates at an aggregated level and disaggregated levels. Overall findings support the positive relationship between trade liberalization and labor demand elasticity in production workers but in the case of non-production workers, the findings show the weak relationship between trade liberalization and labor demand elasticity. The study is also furnished with some policy recommendations.

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