Understanding Manufacturing Informality: Employment and Productivity Linkages with the Formal Economy
This paper on spatial economic relationships explores the possibility that the formal and informal sectors of an economy are deeply interconnected through buyer-supplier networks and through agglomeration effects. Looking at data on Indian manufacturing, this paper investigates employment and pr...
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| Main Author: | |
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| Other Authors: | |
| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
H. : ĐHKT
2020
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| Subjects: | |
| Online Access: | http://repository.vnu.edu.vn/handle/VNU_123/71060 |
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| Institution: | Vietnam National University, Hanoi |
| Language: | English |
| Summary: | This paper on spatial economic relationships explores the possibility
that the formal and informal sectors of an economy are deeply interconnected
through buyer-supplier networks and through agglomeration effects. Looking at
data on Indian manufacturing, this paper investigates employment and
productivity linkages between formal and informal firms and refutes the classical
theory of Economic Dualism. Linkages are estimated by using National Sample
Survey and Annual Survey of Industries datasets that contemporaneously survey
the informal and formal economy respectively at a nationally representative level.
Data from 2001 and 2005 is used, and the unit of analysis is at the state-industry
level. An OLS regression with fixed effects shows that a 1% increase in average
form formal firm size in a particular state-industry category leads to a 0.083%
increase in individual informal firm size. In terms of productivity, the impact of
formal productivity in state-industry on informal productivity is positive but not
significant. |
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