What Drives Manufacturing Productivity? What Are The Productivity Gains From Lower Transport Costs?
The role of manufacturing in economic growth cannot be overemphasized. For manufacturing to reach its full potential however, requires closely concerted investments in infrastructure, training, research, etc. that enable firms to fully utilise the pool of human and physical resources at its disposal. Understanding what boosts manufacturing is important not only because of its high contribution to overall GDP, but also because it creates many new jobs.
Along with my co-author, I aim to understand the macroeconomic conditions that influence the efficiency of manufacturing. We then take a closer look at the impact of lower transportation costs on manufacturing productivity in India using establishment-level panel data during 1998-2012.