Market efficiency of commodity futures in India

This paper aims to examine the market efficiency of the commodity futures market in India, which has been growing phenomenally for the last few years. We estimate the long-run equilibrium relationship between the multi-commodity futures and spot prices and then test for market efficiency in a weak form sense by applying both the DOLS and the FMOLS methods. The entire sample period is from 2 January 2006 to 31 March 2011. The results indicate that a cointegrating relationship is found between these indices and that the commodity futures market seems to be efficient only during the more recent sub-sample period since July 2009.

The informal labour market in India : transitory or permanent employment for migrants?

The informal economy is a very important sector of the Indian economy. The National Council of Applied Economic Research estimates that the informal sector - "unorganised sector" - generates about 62% of GDP and provides for about 55% of total employment (ILO 2002, p. 14). This paper studies the characteristics of the workers in the informal economy and whether internal migrants treat this sector as a temporary location before moving on to the organised or formal sector to improve their lifetime income and living conditions. We limit our study to the Indian urban (non-agricultural) sector and study the characteristics of the household heads that belong to the informal sector (self-employed and informal wage workers) and the formal sector. We find that household heads that are less educated, come from poorer households, and/or are in lower social groups (castes and religions) are more likely to be in the informal sector. In addition, our results show strong evidence that the longer a rural migrant household head has been working in the urban sector, ceteris paribus, the more likely that individual has moved out of the informal wage sector. These results support the hypothesis that, for internal migrants, the informal wage labour market is a stepping stone to a better and more certain life in the formal sector.

Effectiveness of the monetary policy framework in present-day India : have financial variables functioned as useful policy indicators

In April 1998, the RBI, the Indian central bank, formally announced a shift in its policy framework from monetary targeting to a multiple indicator approach, and since then, under this framework, the bank has considered a range of economic and financial variables as policy indicators for drawing policy perspectives. This paper aims to examine the effectiveness of this current policy framework in India by analyzing the causal relationships of each indicator variable on the objective variables. The results reveal that, except for bank credit, all indicator variables considered in this study have a causal relationship with at least either output or price level, suggesting that most preannounced economic and financial variables have served as useful policy indicators under the multiple indicator approach.

The determinants of rural electrification in Bihar, India

This paper explores intra-state disparity in access to electricity and examines the determinants of electrification at the village level in Bihar, one of the underdeveloped states in India. Our field survey of 80 villages in 5 districts conducted in 2008-09 found that 48 villages (60%) are electrified when using the definition of electrification that a village is electrified if any one household in the village is connected to electricity. The degrees of “electrification” in terms of the proportion of household connection and available hours of electricity remain by and large low, and at the same time differ across districts, villages and seasons. In the processes of electrification, approximately 40% of villages have been electrified in recent years. Based on the basic findings of the survey, this paper examines the electrification processes and how it has changed in recent years. The econometric analyses demonstrate that location is the most important determinant of a village’s electricity connection. Another important finding is that with the rapid progress of rural electrificationunder the recent government programme and the tendency to connect the villages which are easily accessible, the collective bargaining power of the village, which used to significantly affect the process of electrification, has lost influence. This adversely affects remote villages. In order to extend electricity supplies to remote and geographically disadvantaged villages, the government needs to consider seriously other options for sustainable electricity supply, such as decentralized distribution of electricity rather than the conventional connection through the national/local grids.

Progress and issues in rural electrification in Bihar, India : a preliminary analysis

Rural electrification has been an important part of government policy since India gained independence. However, despite the number of electrified villages expanding rapidly in recent years, there are many that still remain un-electrified. This paper addresses the issue of intra-state disparity in access to electricity and examines the determinants of electrification at the village level using data from a survey conducted in rural Bihar, one of the underdeveloped states in India. An econometric analysis demonstrates that small villages in remote locations tend to be considered a low priority in the process of electrification. Electrification at the village level in the more advanced states is no longer an issue, though the challenge of access to electrification at the household level remains. This paper also discusses issues that emerged from interviewing villagers and visiting rural areas, and shows that the actual progress of rural electrification may not be as advanced as government statistics indicate.

India's senior citizen's policy and an examination of the life of senior citizens in North Delhi

The paper investigates the ageing situation in India and the development of the government initiatives for the welfare of senior citizens. It also presents the initial results of a survey that the author conducted in 2011 in North Delhi. The main features related to ageing in India are 'feminisation', 'rurality' and 'poverty'. The survey in North Delhi reveals the differences between the male and the female senior citizens, and the vulnerability of the latter, in particular. The social security coverage such as pensions and health insurance was found quite limited among the respondents.

Export-Led Growth and Geographic Distribution of the Poultry Meat Industry in Brazil

This paper includes an examination of the sustainability of recent high growth in the poultry meat industry in Brazil. In addition, an assessment is made of the impact of increased production of poultry meat products on the development of local industries. Comparative studies of leading companies in the United States, Mexico, and Brazil reveal competitive advantages in the low costs of feedstuff and labor as well as disadvantages in the scale of business and management efficiency in the Brazilian poultry sector. Increases in domestic and foreign demand for Brazilian poultry meat have promoted development of the Brazilian poultry sector in local areas. The formation of industrial clusters is observed using regional data related to the location of slaughterhouses and the number of chickens farmed. Statistical analyses support observations made in this paper.

Family Business in Peru: Survival and Expansion under the Liberalization

It is argued that joint stock companies would be transformed from family firms to managerial firms with their development in size and scope. Such managerial firms would have many small shareholders; hence the ownership and management of the firm would be separated. However, in many developing countries including Peru, family businesses, in which families control both ownership and management, still play an important role in the national economy. After the liberalization of economy, which started in Peru in the 1990s, the national market has become more competitive due to the increase in participation of foreign capitals. To secure competitiveness, it is indispensable for family businesses to obtain management resources such as financial, human and technological resources from outside of the families. In order to do so without losing the control over ownership and management, Peruvian family businesses have incorporated companies with distinct characteristics to the extent that they can secure the control over ownership and management inside of their group. While keeping exclusive control of companies in traditional sectors, they actively seek alliance with other families and foreign capitals in competitive sectors. The management of companies with different degrees of control allows them to survive in today's rapidly changing business environment.

Patent policy and public health in developing countries: lessons from Japan

The introduction of pharmaceutical product patents in India and other developing countries is expected to have a significant effect on public health and local pharmaceutical industries. This paper draws implications from the historical experience of Japan when it introduced product patents in 1976. In Japan, narrow patents and promotion of cross-licensing were effective tools to keep drug prices in check while ensuring the introduction of new drugs. While the global pharmaceutical market surrounding India today differs considerably from that of the 1970's, the Japanese experience offers a policy option that may profitably be considered by India today. The Indian patent system emphasizes the patentability requirement in contrast to the Japanese patent policy which relied on narrow patents and extensive licensing. R&D by local firms and the development of local products may be promoted more effectively under the Japanese model.

What Explains Real and Nominal Exchange Rate Fluctuations? Evidence from SVAR Analysis for India

This study empirically analyzes the sources of the exchange rate fluctuations in India by employing the structural VAR model. The VAR system consists of three variables, i.e., the nominal exchange rate, the real exchange rate, and the relative output of India and a foreign country. Consistent with most previous studies, the empirical evidence demonstrates that real shocks are the main drives of the fluctuations in real and nominal exchange rates, indicating that the central bank cannot maintain the real exchange rate at its desired level over time.

Knowledge spillover in Indian automobile industry : the process and the coverage

In India, as the production of passenger cars increased, many local small and medium enterprises (SMEs) entered the parts and components manufacturing sector. The sources of knowledge for large enterprises and SMEs are different. Naturally, spillover effects among large enterprises and between large enterprises and SMEs are different. This paper focuses on knowledge spillover among large enterprises and from large enterprises to SMEs. Subcontractor can absorb relation-specific skills through repeated interaction with parent company. The results of field survey emphasizes that relation-specific skills are a determinant factor of spillover effects from assemblers and large auto component manufacturers to SMEs. Econometric analysis shows that spillover effects among medium and large automobile units and from medium and large automobile units to small units went beyond boundary of cluster.

Central bank intervention and exchange rate behaviour : empirical evidence for India

This paper examines the causal relationship between central bank intervention and exchange returns in India. Using monthly data from December 1997 to December 2011, the empirical results derived from the CCF approach of Cheung and Ng (1996) suggest that there is causality-in-variance from exchange rate returns to central bank intervention, but not vice versa. These findings are robust in the sense that they hold in cases where the returns were measured from either the spot rate or the forward rate. Therefore, the results of this paper suggest that the Indian central bank has intervened in the foreign exchange market to respond to exchange rate volatility, although the volatility has not been influenced by central bank intervention in the form of net purchases of foreign currency in the market.

Better than nothing? : dowry in the absence of the legal protection of women's inheritance rights

The practice of dowry is often thought to be the root cause of the unequal treatment of women in India. For women without inheritance rights, however, dowry may function as their only source of protection. Using a nationwide dataset and exploiting a natural experimental situation, this study explores the effects of dowry on women's empowerment in India, a society where women do not have inheritance rights. In such a society, dowry seems to enhance women's status in the marital household. The effects reverse when women have equal inheritance rights as their brothers. Empirical analysis suggests that the outright ban on dowry that ignores the context may not necessarily benefit women.

Skill sorting and production chains : evidence from India

This study proposes a new mechanism that explains skill-sorting patterns and skill wage differentials across industries based on the length of the industry's production chain. A simple simultaneous production model shows that when the quality of intermediate inputs deteriorates rapidly along the production chains, high-skilled individuals choose to work in industries with shorter production chains because of higher returns to skill. I empirically confirm this skill-sorting pattern and these inter-industry skill wage differentials in India, where the quality of intermediate inputs is likely to degrade rapidly because of the high number of unskilled laborers, poor infrastructure, and less-advantaged technology. The results remain robust even when considering selection bias, alternative reasons for inter-industry skill wage differentials, and a different period. The results of this study have important implications when considering countries' industrial development patterns.