Policy brief: Total Factor Productivity Spillovers in India

Abstract

The aim of this research is to determine whether the Indian economy benefitted from trade liberalisation not only through the direct effect on firms most exposed to international trade, but also through additional spillovers from the firms directly affected to other firms in the economy. The authors use a comprehensive dataset of Indian manufacturing firms and employ a spatial econometric technique to estimate the strength of inter-firm TFP spillovers. This policy brief summarises the research methods and outcomes of the paper and discusses several policy implications