The paper provides an explanation of recent empirical evidence on fragmentation and the expansion of the informal sector in India. We argue that as the prospect of getting a better price in the international market increases, the producers in the formal sector act more like merchants and...

Is the informal sector in India a means of exploitation or a means of accumulation? One view takes the informal sector to be a site for primitive capital accumulation, with underpaid workers working in abysmal conditions. Another view takes the informal sector to be the venue for economic...

The study investigates how market imperfections distort the impact of trade reform on productivity growth. As the trade expands it influences both product and factor prices and if the distortions arise due to these market imperfections are not eliminated, the usual estimate of total factor...

The paper presents an empirical investigation into alternative forms of organisation of rural industries and their dynamics in the post-reform period of India by means of a field survey carried out in the state of West Bengal in 2001--02. The selected industries (handloom, brassware, hornware,...

This paper makes an attempt to estimate the index of informal sector employment that can be attributed to the supply-push phenomenon. Factors explaining the inter-state variations in this index include the industrial-informal sector wage gap, revenue expenditure and development expenditure...

We show the effects of trade cost reduction in the presence of a domestic firm's strategic output allocation between formal in-house production and subcontracting to the informal sector. Considering a one-way trade, we show that trade cost reduction increases the in-house unionised wage,...

The issue of economic governance is highly discussed pertaining to the question of industrialisation of a country, but the literature on trade and foreign direct investment (FDI) hardly pays attention to this aspect. We develop a simple model to show how good economic governance in the domestic...