Does Rising Energy Prices Lead to Production Fragmentation? An Example from Indian Manufacturing Industries

South Asia Economic Journal Pub Date : 2023-03-01 DOI:10.1177/13915614231167724

Supratik Guha

引用次数: 0

Abstract

How does the price of energy affect the extent of production fragmentation in India’s manufacturing industries? The prevailing literature has engaged with production fragmentation and trade in middle products for a long time, but the relationship between energy prices and production fragmentation is less understood. This article deals with firm-level panel data of India’s manufacturing industries between 2005 and 2018 to estimate the impact of rising energy prices on the outsourcing decisions/production organization of the manufacturing firms. The article also uses a number of covariates, including wages, welfare expenses, sales, profit after tax, dividend rate, foreign exchange earnings and an interaction term between energy prices and foreign exchange earnings. The empirical results of this article indicate that larger firms tend to outsource production in part to smaller firms in order to cope with rising energy prices and keep their profitability intact. Static and dynamic panel estimates with a variety of robustness analyses support the main conjectures. JEL Classification: F18, L23, Q410, Q500

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能源价格上涨会导致生产碎片化吗?以印度制造业为例

能源价格如何影响印度制造业生产碎片化的程度?长期以来，主流文献一直在研究生产碎片化和中间产品贸易，但对能源价格与生产碎片化之间的关系却知之甚少。本文分析了2005年至2018年印度制造业的企业层面面板数据，以估计能源价格上涨对制造业外包决策/生产组织的影响。本文还使用了一些协变量，包括工资、福利费用、销售额、税后利润、股息率、外汇收益以及能源价格与外汇收益之间的相互作用项。本文的实证结果表明，大公司倾向于将部分生产外包给小公司，以应对不断上涨的能源价格并保持其盈利能力不变。静态和动态面板估计与各种稳健性分析支持主要猜想。JEL分类:F18、L23、Q410、Q500

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

South Asia Economic Journal Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.