This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. ASSA Annual Meeting
  3. 2023
  4. Program
  5. Trade and Development Issues in India
« Back to Results

Trade and Development Issues in India

Paper Session

Friday, Jan. 6, 2023 2:30 PM - 4:30 PM (CST)

New Orleans Marriott, Preservation Hall Studio 7
Hosted By: Association of Indian Economic and Financial Studies
  • Chair: Raja Kali, University of Arkansas

Immigration and Trade: Skilled versus Unskilled Migration and Corruption

Kusum Mundra
,
Rutgers University
Tianhao Liu
,
Rutgers University

Abstract

Pro-trade effect of immigration on bilateral trade between the immigrants’ host and home
countries is well established in the literature (Gould 1994, Dunlevy and Hutchinson 1999, Mundra
2005, Rauch and Trindade 2002, Ottaviano et al. 2018). There is also increasing work showing
that pro trade effect of immigrants on trade varies with type of goods as well as with immigrant
occupation and education (Mundra 2014 and Felbermayr and Toubal, 2012). In this paper we
focus on the effect of skilled versus unskilled immigrants on the host country exports and
particularly focus on how this effect varies with the level of corruption in the immigrants’ home
country. This paper will add to the literature by examining that immigrants not only will have
differential effect on trade based on their skill but also the level of corruption in their home country
which signifies weak institution in their home country. This is important to examine not only for
the rich immigrant receiving countries but also for developing big immigrant sending countries
like India, China and countries in Latin America. Skilled Immigrants are considered brain drain
from the sending country, but they significantly promote trade for their home country as well as
for their host country.

Resilience of the Group Lending Model to a COVID-19 Induced Shock:  Evidence from an Indian Microfinance Fund

Asli Ascioglu
,
Pace University
Padma Kadiyala
,
Pace University

Abstract

The evidence offered by our study has implications for systemic risk, or the risk of economy-wide spillovers of defaults arising in the MF sector. Our study shows that borrowers bounced back almost immediately, either making full or partial payments, after April and May 2020. We also find that defaults had fallen to 5.92% in December 2020 from a peak of 95.29% only eight months earlier during the height of the Covid pandemic in April 2020. Our study provides evidence in support of Group Lending: the Group Lending model appears to be largely successful in reducing idiosyncratic risk of borrower default among borrowers with no formal schooling. The ability to measure the extent of default and clustering of defaults will assist in the pricing of investment products tied to the MF sector. It is crucial to understand the risk-return profile of this sector which to date, accounts for over $115 billion in lending worldwide, and for over $25 billion in India.

Does the Gender of the Owner Affect Firm Productivity in India’s Informal Economy?

Ira Gang
,
Rutgers University
Rajesh Raj Natarajan
,
Sikkim University
Kunal Sen
,
United Nations University-WIDER and University of Manchester
Myeong-Su Yun
,
Inha University

Abstract

We examine the patterns and correlates of the productivity gap between male owned and female owned firms, for informal enterprises in India. Female owned firms are on average 45 per cent less productive than male owned firms, with the clearest productivity gaps observed at the lower end of the productivity distribution. We measure a firm’s productivity in terms of its labour productivity. Using decomposition methods, we find that structural effects explain about 73 per cent of the productivity gap with the remainder being due to differences in observable characteristics as captured by composition effects. We also find that among observable characteristics, the most important contributing set of factors explaining the gender productivity gap are firm characteristics such as firm size, age of the firm, assistance from the government, registration with state authorities, working on a contract basis and maintaining accounts. Male owned firms are more advantaged in these characteristics than female owned firms.

How Climate Change Affects the Ganges and Water Pollution by Tanneries in Kanpur

Amitrajeet Batabyal
,
Rochester Institute of Technology
Karima Kourtit
,
Open University
Peter Nijkamp
,
Open University

Abstract

We provide a theoretical framework to analyze how climate change influences the Ganges and how this influence affects pollution in the river caused by tanneries in Kanpur, India. We focus on two tanneries, A and B, that are situated on the same bank of the Ganges in Kanpur. Both produce leather and leather production requires the use of noxious chemicals. Tannery A is situated upstream from tannery B. Tannery A’s leather production depends only on labor use but tannery B’s leather production depends on labor use, the chemical waste generated by tannery A, and the natural pollution absorbing capacity of the Ganges. In this setting, we perform four tasks. First, we construct a metric that measures the climate change induced mean reduction in the natural capacity of the Ganges to absorb pollution in the time interval [0, t]. Second, we use this metric and determine the equilibrium production of leather by both tanneries in the benchmark case in which there is no pollution. Third, we ascertain how the benchmark equilibrium is altered when tannery B accounts for the negative externality foisted upon it by tannery A. Finally, we study the impact on leather production and on labor use when the two tanneries merge and then discuss the policy implications stemming from our research.

Old Age Pension and Female Labour Supply in India

Vidhya Unnikrishnan
,
University of Manchester
Kunal Sen
,
United Nations University-WIDER and University of Manchester

Abstract

Whether cash transfers have unintended behavioural effects on the recipient household’s labour supply is of considerable policy interest. We examine the impact’ of the Indira Gandhi National Old-Age Pension Scheme (IGNOAPS) on prime-age women’s labour supply decisions in India, where female labour force participation continues to decline over time. We use propensity score matching (PSM) to make households with IGNOAPS recipients comparable with program non-recipients. Further, we use individual fixed effects (FE) to eliminate the effect of other time invariant unobservable characteristics on women's labour market behaviour. Our results from the PSM-FE suggest that having a pensioner in the household increases the probability of working in paid employment by 3.87 percentage points for women aged20–50. We suggest that this positive effect results from the income effect of the scheme, leading to reduced labour supply by the pensioner, allowing them to provide greater childcare support.

Discussant(s)
Sushanta Mallick
,
Queen Mary University of London
Kunal Sen
,
United Nations University-WIDER
Amitrajeet Batabyal
,
Rochester Institute of Technology
Mehtabul Azam
,
Oklahoma State University
Bhanu Pratap
,
Reserve Bank of India
JEL Classifications
  • F4 - Macroeconomic Aspects of International Trade and Finance
  • O1 - Economic Development