Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82760
Authors: 
Douhan, Robin
Nordberg, Anders
Year of Publication: 
2007
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2007:16
Abstract: 
It is often assumed that recent success in the high-technology software industry will lead India’s development. However, evidence suggests that basic manufacturing industry is stagnant. This paper proposes a mechanism that ties these two trends together. A big-push type of model, featuring linkages between firms, demand spill-over, and technology choice is elaborated. By imposing di¤erent cost structures on the manufacturing and high-technology industries the model describes outcome in terms of distribution between sectors. It is found that a policy promoting a high-technology sector can have negative effects on the manufacturing industry as well as aggregate income. A policy directing resources towards infrastructure benefits all sectors and increases aggregate income. The results from the model are found to correpond with the recent development pattern in India.
Subjects: 
Industrialization
India
Industrial structure
JEL: 
L16
O14
O25
Document Type: 
Working Paper

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