Academic journal article IUP Journal of Applied Economics

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Academic journal article IUP Journal of Applied Economics

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Article excerpt

The stabilization and structural reform program in India was implemented against a background of incomplete structural transformation, widespread poverty, low level of human development and distorted pattern of expenditure on health and education oriented towards the relatively well-offsections of the society. The government has undertaken both stabilization and structural reforms as two components of the economic reform package since July 1991. Foreign Direct Investment (FDI) in India has grown immensely during the reform period due to strong support from the union government. Hence, it is worthwhile to examine why China is able to get more FDI than India despite her many relative advantages. One significant factor cited for the difference is the contrasting discretion in adopting policies of openness by the respective governments. GDP growth and poverty reduction that might occur following trade liberalization need not necessarily result in an improvement in the food security of the poor. Trade policy analysis should consider indicators of food security in addition to overall growth and poverty. Manufacturing growth in India during the postreform period presents a somewhat mixed picture. Capacity additions through investments are critical for accelerating growth in Indian manufacturing industries.

The first paper, "Foreign Shareholding and Productivity Spillover: A Firm-Level Analysis of Indian Manufacturing", by Pritish Kumar Sahu and Sakiru Adebola Solarin, examines the spillover from FDI in Indian manufacturing by using the firm-level data for the period 2000-2009 employing a Cobb-Douglas-type production function. The paper sheds light on the possible reason for positive spillover by analyzing some more factors of the present dataset. The main findings in the context of entire manufacturing demonstrate positive and marginal impact of FDI on productivity spillover of the domestic firms. Further, the findings put forward that the overall economic growth, growing domestic market, availability of lowcost labor, development in credit policy, increased expenditure on research and development, and more import of capital goods could be other possible reasons for the positive productivity spillover in the recent years.

The second paper, "Oil Discovery and Sectoral Performance in Nigeria: An Appraisal of the Dutch Disease", by Ismail O Fasanya, Adegbemi B O Onakoya and Misbaudeen A Adabanija, attempts to examine the effect of oil discovery on sectoral performance in Nigeria, using the time series data from 1975 to 2010, based on the Dutch Disease hypothesis and combining several procedures in modern econometric estimation techniques. …

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