INFORMALIZATION OF INDUSTRIAL LABOR IN INDIA: EFFECTS OF LABOR MARKET RIGIDITIES AND IMPORT COMPETITION

Since the 1980s, industrial labor in India has been increasingly informalized, manifested in a rising share of unorganized sector employment and the growing use of temporary and contract workers, and subcontracting in organized manufacturing. Using unit‐level data from the National Sample Survey employment–unemployment survey for 2004–5, the paper investigates econometrically whether labor market rigidities and import competition have been responsible for the informalization of industrial labor in India. The results of econometric models show that labor market reforms tend to increase the creation of regular jobs, while import competition tends to raise casual employment among workers with education levels above primary.     

TRADE LIBERALIZATION AND PRICE‐COST MARGIN IN INDIAN INDUSTRIES

Using panel data for 137 three‐digit industries for 1980/81 to 1997/98, the paper examines the effect of trade liberalization on price‐cost margins in Indian industries. An econometric model is estimated to explain variations in price‐cost margins, taking tariff and nontariff barriers among the explanatory variables. The results indicate that the lowering of tariffs and removal of quantitative restrictions on imports of manufactures in the 1990s had a significant pro‐competitive effect on Indian industries, particularly concentrated industries, tending to reduce the price‐cost margins. The paper notes that despite the pro‐competitive effects of trade liberalization reinforced by domestic industrial deregulation, the price‐cost margin increased in the post‐reform period in most industries and aggregate manufacturing, which is attributed to a marked fall in the growth rate of real wages and a significant reduction in labor's income share in value added in the post‐reform period, reflecting perhaps a weakening of industrial labor's bargaining power.     

The Role of Institutional Investors in Voting: Evidence from the Securities Lending Market

This paper investigates voting preferences of institutional investors using the unique setting of the securities lending market. Investors restrict lendable supply and/or recall loaned shares prior to the proxy record date to exercise voting rights. Recall is higher for investors with greater incentives to monitor, for firms with poor performance or weak governance, and for proposals where returns to governance are likely higher. At the subsequent vote, recall is associated with less support for management and more support for shareholder proposals. Our results indicate that institutions value their vote and use the proxy process to affect corporate governance.     

Financial Crisis, “New” Industrial Policy,and the Bite of Multilateral Trade Rules

The recent Great Recession has triggered substantial government intervention – not all of it macroeconomic. This article presents evidence that the sectoral incidence and forms of government intervention appear to have changed from pre-crisis regularities. Once the commercial significance of a sector is taken into account, pre-crisis measures of trade policy intervention poorly predict the crisis-era sectoral incidence of discriminatory state measures imposed by Asian governments. Qualitative evidence focusing on three key countries in Asia – China, Japan, and South Korea – is also marshaled to sustain the contention that Asian governments have used the recent economic crisis to reinvigorate industrial policies, targeting apparent growth poles and apparently environmentally friendly technologies and sectors. Implications for the expansion of World Trade Organization rules and their effectiveness are discussed.