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2017 | Book

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Trade Liberalisation, Economic Growth and Environmental Externalities

An Analysis of Indian Manufacturing Industries

Author: Hansa Jain

Publisher: Springer Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft" , Springer Professional "Technik"

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About this book

The book examines the trade liberalization measures, which were initiated in India during 1991 and which focused on manufacturing industries. This industry was considered because of its strong inter-sectoral links and its capacity to stimulate the growth of other sectors. The resulting liberal trade policies, involving a reduction in trade barriers and inflows of FDI, capital and technologies, were adopted to increase the manufacturing output. However, these measures were most beneficial to those industries whose products have greater demand in developed countries. Against this backdrop, the book breaks down the overall effect of trade-induced manufacturing growth into scale, composition and technique effects to discuss the impact on environmental externality. In addition to manufacturing activity, it also investigates the effect of other factors that improve with economic growth and examines the extent to which India’s trade-led economic growth allows production activities to move to cleaner technologies and whether India has achieved its economic growth by specializing in pollution-intensive (low technology) industries. The book also estimates the impact of these environmental externalities on society’s wellbeing.

Table of Contents

Frontmatter
1. Introduction
Abstract
The liberal trade policies that involved reduction in trade barriers and facilitated inflows of foreign direct investment, capital and technologies restructured the Indian manufacturing industries. Apart from the difference in factor endowments, the comparative advantage nowadays is seen in terms of environmental regulatory gaps between the trading partners. This raises the concern whether trade-induced production structure of Indian manufacturing industries is generating environmental externality. This study is endeavoured to explore the relationship between trade liberalization, economic growth and environmental externalities by taking the case of Indian manufacturing industries. This chapter gives an overview of the subject, statement of the problem, objectives and scope of the study.
Hansa Jain
2. Review of the Existing Literature
Abstract
The issue of economic growth and environmental quality has largely been discussed by various social scientists, economic thinkers and environmentalists. The relationship of trade and environment has also received considerable attention. This chapter presents the review of the existing studies under (i) trade liberalization-led economic growth; (ii) liberalized policies (on trade and investment) and its environmental implications at global and India levels; (iii) growth–environment interactions; (iv) market economy, property rights and environmental externalities. However, the studies measuring the impact of economic reforms on environment are scant at India level. Since the nature of externalities and its impact on society depends upon various socio-economic factors, such studies require a country-/area-specific approach.
Hansa Jain
3. Methodology
Abstract
The study adopts two approaches: (a) macro level and (b) micro level. The macro-level approach deals with examining the post-liberalization changes in the structure of manufacturing industries and estimation of industrial pollution loads for India as a whole. The micro-level approach deals with estimating the impact of pollution on social well-being at the village level. The chapter discusses the method of data collection, calculation of pollution loads and model specifications for estimating the impact of trade-led manufacturing growth on environment in terms of scale effect, composition effect and technique effect. An empirical model (ordinal logit model) is also constructed for estimating the impact of pollution on social well-being taking the case of Gujarat.
Hansa Jain
4. Trade Liberalization Process and India’s Growth Experiences
Abstract
Trade liberalization enables the country to compete with other countries. The increase in competition directs the resources from less advantageous activity to more advantageous activity. The efficient allocation of resources enhances productivity. Considering the importance of trade in the growth process, India’s post-liberalization growth experiences are highly influenced by its restructured trade pattern. This chapter captures these experiences by focusing on trade liberalization process and emerging pattern of India’s external trade. The chapters includes an overview of India’s trade liberalization process, tariff policy according to industrial products and stages of processing; trends and patterns of FDI flow in Indian industries; foreign technology transfers; post-liberalized experiences in terms of exports, imports and trading partners; and relationship between India’s post-reforms growth and instruments of trade liberalization using elasticity coefficients.
Hansa Jain
5. Changing Structure of Indian Manufacturing Industries
Abstract
The structure of manufacturing industries depends upon the nation’s industrial and trade policies and accessibility to resources, capital and technologies. The economic openness has enabled the developing countries to explore cheaper inputs and technologies and exchange knowledge and ideas across the world. This chapter focuses on the structural changes that have taken place in Indian manufacturing industries as a result of trade openness. The chapter deals with examining the overall changes in the growth pattern of manufacturing industries, determining structural changes at industrial level, comparing the trade liberalization, trade orientation and comparative advantage of Indian manufacturing industries and, finally, developing relationship between various trade-related variables like tariff rate, FDI, capital–labour ratio, import penetration, export orientation, revealed comparative advantage and technological intensity.
Hansa Jain
6. Trade Liberalization, Manufacturing Growth and Environmental Externalities
Abstract
Chapter 4 shows that India has major trade and investment relationship with developed countries of the world. Chapter 5 show that the structure and pattern of Indian manufacturing industries has changed over the past two and half decades. Taking into account the differences in environmental norms between the developed and developing countries, there is a concern that whether trade-oriented manufacturing growth is generating any environmental externality in India. This chapter examines the trends of manufacturing growth and pollution concentration in India, finds the relationship between manufacturing output and pollution loads at industry level and estimates the impact of manufacturing growth on environmental externalities by decomposing the total trade effect into scale, composition and technique effects.
Hansa Jain
7. Environmental Externality and Well-Being: A Micro-Level Approach with a Focus on Gujarat
Abstract
This chapter deals with the micro-level approach to find the impact of industrial pollution on the well-being of the local people living at a radius of 10 km from industrial location. The chapter presents the results of the survey conducted for two industries of Gujarat. After giving an overview of the selected area and sample characteristics, the chapter focuses on the household’s awareness about industrial emissions, respondent’s opinion about the impact of industrial pollution on agricultural productivity, livestock and human health and, finally, the estimation results. Since the impact of pollution on society varies according to socio-economic and industry-based factors, the variables related to demographic characteristics, occupational structure, educational and housing status and agricultural status of the household as well as pollution-related variables were taken into consideration.
Hansa Jain
8. Summary, Conclusion and Policy Implications
Abstract
This chapter concludes the study. The study considers that the inefficiencies in production processes generate negative environmental externalities. Maintenance of environmental standards is itself luxurious for India as it involves the cost of abatement technologies, monitoring equipment, etc. The factors like education, skill and infrastructural facilities improve with the process of development and contributes to increase in production efficiency and thus environmental externality. The study suggests some alternative measures that would increase the production efficiency on the one hand and would increase the social well-being on the other.
Hansa Jain
Backmatter
Metadata
Title
Trade Liberalisation, Economic Growth and Environmental Externalities
Author
Hansa Jain
Copyright Year
2017
Publisher
Springer Singapore
Electronic ISBN
978-981-10-2887-8
Print ISBN
978-981-10-2886-1
DOI
https://doi.org/10.1007/978-981-10-2887-8