Indian Manufacturing Sector Research Articles

Incidence of Corporate Income Tax: Estimates from Indian Manufacturing Firms


 
 
 
 The purpose of this paper is to examine the incidence of corporate tax on capital and labour in Indian manufacturing sector. The paper employs ‘Seemingly Unrelated Regression Method’ with add-up restriction based on the work of Desai, Foley and Hines (2007). The study shows that, for the manufacturing sector in India for the period 2005-19, the corporate tax has a significant adverse impact on both wages paid to employees and profit after tax. Capital owners bear 96.3% of the tax burden and labours bear only 3.7%. The adverse effect on wages is slightly higher in public firms than in private firms. The relative tax burdens of labour and capital remained the same in the pre-2008 global economic crisis and post-crisis periods. The impact on both wages and profits increase with age and size of firms but decrease with leverage. These results will be useful to policymakers and other stakeholders to take appropriate strategies to design the corporate tax policy such that it is more redistributive, and not a burden for labour in manufacturing firms in India. The paper contributes to the scant empirical literature on corporate tax incidence.
 
 
 

Opportunities and Challenges of Toy Manufacturing Sector in India

This article studies the opportunities and challenges that persist for the Toy Manufacturing sector in India. India is named for its traditional toy a year back history of 5000 years. The industry gives more employment opportunities and provides more revenue to the people who depend on it. But due to the change in liking of traditional toys, patterns and innovation of Chinese toys create a great deal of trouble to the Indian manufacturers. The study is essential in estimating the opportunities and challenges available in the toy manufacturing sectors in India. The study adopts the literature survey approach, mainly from various agencies' reports and news from the websites. The at manirbar mantra, Covid 19 influence, Global scenarios link shows significant opportunities for toy manufacturing sectors. Challenges are found to be in the availability of foreign toys, increased import duty on raw material and capital goods, and introduction of quality standards in Toy Production.

Does internal control process and firm characteristics improve firm value? An empirical analysis in the manufacturing sector.

The purpose of this research is to investigate the role of enterprise risk management (ERM), Big4 auditors and firm characteristics on firm value. This population study was conducted in the Indian manufacturing sector. Annual panel data for 11 years (2007–2017) was collected from 60 firms on the National Stock Exchange (NSE). Empirical findings prove that there is variation in Tobin’s Q but no difference in return on assets (ROA) and return on equity (ROE) among firms that have implemented ERM and included Big4 audit firms. The study documents that Q was influenced by the implementation of ERM, liquidity, firm age and firm size. Findings reveal that ERM, firm size, leverage, firm age, liquidity and firm complexity impacted ROA. The study outcome also shows ROE was affected by leverage, firm size, liquidity and firm complexity. This study is a valuable addition to the existing studies on the Indian manufacturing sector and has contributed incredible insights to the empirical literature on firm value from the multidimensional outlook of the purchasers, management, and investors. The findings have several implications for investors, managers and researchers.

Development of an instrument for Risk factors of ERP implementation in Indian Manufacturing Sector

Development of an instrument for Risk factors of ERP implementation in Indian Manufacturing Sector

Criticality prioritisation of risk factors in the Indian manufacturing industries using TOPSIS

This article aims to identify the critical risk factors (CRFs) in the Indian manufacturing sector and prioritise them based on their severity. The article further provides the roadmap for effective risk management. Findings from the articles published in peer-reviewed international journals, coupled with the actual industrial scenario, are presented in this paper. This article applies the technique for order preference by similarity to the ideal solution (TOPSIS), one of the key multi-criteria decision-making (MCDM) techniques. Primary data was obtained by consulting fourteen industry experts (IEs) from reputed industries. CRFs are ranked in the order of their criticality based on the input received. This article presents TOPSIS demonstration using R software. The article uncovers the ten CRFs in the manufacturing sector. The ranking tool, with consideration of six selected criteria, derived 'supplier-related risks' and 'design-related risks', as the foremost risk factors, whereas 'scope change risk' and 'safety-related risk', obtained a lesser rank.

Impact of CSR spending on Corporate Financial Performance -An Empirical Evidence from the Indian Manufacturing Sector

Impact of CSR spending on Corporate Financial Performance -An Empirical Evidence from the Indian Manufacturing Sector

Challenges of sustainability in Indian manufacturing sector: a critical review

Sustainability has become the critical constraint in any industry around the globe. It defines the new measuring standard that would help to improve the social, economic and environmental aspects in an industry. The paper intends to bring into limelight the various challenges/factors/barriers affecting the implementation of sustainability in manufacturing industries of India. The factors have been articulated from a vast literature survey encompassing journals from 1994 to 2019. The research extends further to enquire practitioners, industry professionals and academicians in India through a close-ended questionnaire. The responses, when analysed, yielded 24 factors, which were identified as major hindrances to Indian context of sustainable manufacturing. Some of the major factors are product life cycle design and 6R. Each factor has been elucidated in the respective context. The authors have tried to classify these factors into seven major factor-groups affecting sustainable manufacturing. The results of the survey indicate that the 24 factors are hindrances or challenges to the Indian manufacturing sector. This research is a preliminary attempt to revolutionise the transformation of Indian manufacturing practices into sustainable ones.

Empowering Engineering students through employability skills

Abstract: “Skill growth is critical in stimulating a sustainable development environment and will help to ease the transition from an informal to a formal economy,” according to the International Labour Organization. In the light of globalization, it is also important to discuss the possibilities and pressures of meeting emerging demands from changing economies and modern technologies.” Management and innovation students who want to be practitioners require not only soft skills but analytical and datum, to achieve the organization's objectives. The Indian manufacturing sector is revered globally and is one of India's most successful industries. It has made a significant contribution to India's capital formation and hence GDP. Over the years, global expertise and enabling sale situations have ensured that India continues to be one of the w o r l d ' s m o s t c o m m e r c i a l h e a l t h c a r e a n d manufacturing markets. The job process has seen a notable shift; technology affects customs and skills, and communities are becoming more global and diverse. As an effect of globalization, education systems are now also looking at the employability market. Apart from technical skills, applicants are also expected to have interpersonal skills in the current scenario. The study aimed to determine final-year engineering learners' perspectives, faculty-approved by engineering colleges and technical specialists from various professional bodies on training needs, career progression, and career apprenticeship programs. Keywords: Career progression; Employability skills; interpersonal skills.

E-Commerce, and the Indian Retail and Manufacturing Sectors - An Empirical Analysis with a Special Focus on Organised Sector MSMEs

E-Commerce, and the Indian Retail and Manufacturing Sectors - An Empirical Analysis with a Special Focus on Organised Sector MSMEs

Import Competition, Formalization, and the Role of Contract Labor

Using the case of the Indian manufacturing sector and exploiting plausibly exogenous variation from Chinese imports, we provide causal evidence that higher import competition increases the share of the formal enterprise employment. We find an increase in the level of formal enterprise employment, driven by the high productivity firms, and in contrast, a fall in the informal enterprise employment. This labor reallocation is enabled by contract workers, who do not carry stringent ring costs. Our estimates imply that Chinese import competition led to an increase in the share of formal sector employment by 4.1 percentage points between 2000 and 2005. We calculate the labor productivity gap between the formal and informal sector, adjusting for differences in prices and worker characteristics and find them to be salient in explaining the observed gap. Our preferred estimate of the productivity gap implies an increase in labor productivity by 3.19% in response to Chinese import competition.

Governmental Announcements and Indian Stock Market: Evidence from Indian Manufacturing Sector

The Indian Manufacturing sector lags behind in contributing to economic devel- opment, as compared to its peer nations and therefore, to boost the sectorís contribution to the economy and to transform the economy into a cashless economy, the government of India had announced three major steps, Make in India, Demonetization and GST. In the present study using event study methodology, the immediate impact of the announcements on the stock of the companies from the Indian Manufacturing sector is examined and found that the announcement of the Make in India positively ináuenced the security returns. In contrast, negative impact on the security prices is witnessed on the announcement of Demonetization, whereas the GST implementation has no impact.

An Empirical Investigation of Global Production Networks in Indian Manufacturing Sector

This article attempts to dive into the operation of global production networks in India with manufacturing sector in the primary scope of focus. It aims to analyse the long-run and short-run relationship among the factors which form a global supply chain and their effects on a supply chain, using yearly data from 1984 to 2017. Our primary results from the estimations show that all the factors incorporated into the study are important for initiation and effective execution of a supply chain. The autoregressive distributed lag model shows that Index of Industrial Production (IIP), export–import ratio, KOF index and electricity index affect a supply chain positively whereas USD–INR exchange rate and unemployment rate affect gross value added negatively. The error correction model shows long-run relationship between IIP and export–import ratio. The study also highlights the importance of trade balance and industrial production in the long run.

Assessing the Impact of the Mobile Manufacturing Sector on Indian Economy

Indian mobile phone manufacturing sector has performed tremendously during the last few years. Currently India is the second biggest mobile phone market in the world. The total number of mobile manufacturing units in India has increased to 268 in 2019 from just 2 in 2014. Together these units employ 6.7 lakh people. The mobile phone sale in India has shown a compounded annual growth rate of 6.66 percent and 6.54 percent, respectively, for volume and value between 2007 and 2018. During 2018 the average monthly sale of mobile phones was 10 million. There were around 75 brands and 3,400 models of mobile handsets in Indian market during 2019. India now accounts for 11 percent of global mobile production, which was only 3 percent in 2014. The mobile manufacturing sector has achieved this success in a very short span of time. Hence, it is important to examine the factors that led to the phenomenal success of the sector. Second, what is the impact of this success to the Indian economy? These are the two prime objectives the current article attempts to explore. The study finds Indian policy initiatives, digital India campaign among a few others have contributed immensely to the growth of the sector. Analyzing the factors like domestic sale and export of mobile handsets, FDI received and employment generated for the period between 2014 and 2019 the study finds a positive impact created by this sector to the Indian economy.

Labour Market Institutions, Industry Structure and Productivity in Indian Manufacturing Sector

Labour Market Institutions, Industry Structure and Productivity in Indian Manufacturing Sector

Is India's formal manufacturing sector ‘hollowing out’- importance of intermediate input

Changes in India's economic policies during the last three decades were expected to spur competition in the domestic market. Greater competition, particularly in capital goods, was expected to improve production efficiency. An important dynamic to analyze manufacturing sector's efficiency is to understand the relationship between industry's value addition and value of output. In the case of India's formal manufacturing sector, the share of value addition in output has declined sharply since 1998–99. This raises a question as to whether the Indian manufacturing sector is going through a phase of ‘hollowing out’. This paper examines the potential reasons behind such decline. One such reason relates to the intensity at which inter- mediate goods are used in the production process. The value of intermediate goods relative to the gross value of output is as high as two-third in India's formal manufacturing sector. Despite the recognition of the importance of intermediate goods as an input, it has received relatively little attention in the literature on development accounting. The paper considers a model on the assumption that a firm's production function is measured in terms of capital, labour, and intermediate goods. The paper estimates the output elasticity of intermediate inputs for the formal manufacturing sector and assesses how it has changed during the 1990s and 2000s. The production function is estimated using both fixed effects and Levinsohn and Petrin model to control for the endogenous productivity problem. The paper quantifies the relationship between the intensity at which a concerned industry utilises intermediate goods in the production process and productivity (TFP) of the sector. The empirical analysis points toward a biasness in productivity that may arise if one ignores the importance of intermediate goods as a production factor. The analysis highlights that the intensity of intermediate-goods impact the productivity observed in India's formal manufacturing sector from 1988–90 to 2015–16.

Mediating Role of Psychological Contract Fulfilment on the Relationship between Strength of HR Signal and Organisational Commitment: Evidence from the Indian Manufacturing Sector

This study examined the relationship between human resource (HR) signals’ strength and affective organisational commitment (AOC) through the mediating role of psychological contract fulfilment (PCF). Survey data were collected from 460 manufacturing sector respondents. Structural equation modelling confirmed that HR signals’ strength and PCF positively influenced AOC. PCF also mediated the relationship between the HR signal and AOC’s strength. Results have theoretical implications, as well as practical implications for the management to consider fulfilling its obligations to meet employee needs and expectations through appropriate HR strategies for enhancing employees’ AOC.

Development and Validation of Industry 4.0 Readiness Scale — A Formative Model

The purpose of this paper is to develop a suitable formative scale for Industry 4.0 readiness assessment and validate in the Indian steel manufacturing sector. For this, a literature review was undertaken to identify the relevant dimensions and items to assess the Industry 4.0 readiness at micro-level. Further, a pilot study and content validity were undertaken with experts from the industry and academia to find out the relevance of the dimensions and their items. The index thus developed was administered among top-level managers from steel manufacturing organizations and the data was analyzed using PLS-SEM. The findings revealed the most important parameters — strategy & organization; business model; manufacturing & operations; supply chain; products & services along with 21 indicators to be significant in all cases to assess Industry 4.0 readiness.

DISPERSION IN INPUT AND OUTPUT PRICES: A FIRM-LEVEL ANALYSIS

Analyzing representative and rich data on the Indian formal manufacturing sector, this paper tries to establish an empirical relationship between prices of input, output and firm size of the plant. The firm-level data reflect tremendous dispersion in prices that firms pay to purchase material input even within an industry. Price heterogeneity is also observed for prices that firms charge for their output even for narrowly defined products. The paper constructs a model using information on output and input choices by firms to analyze the observed patterns. The paper finds that on average, bigger plants not only pay a premium for the inputs used in the production process, but also charge a premium for their outputs. After documenting the empirical relationship, the paper discusses the possible sources for price dispersion. The paper highlights sectoral variations in the correlation between plant size and prices, which are consistent with the findings in the literature related to the scope for quality differentiation in output as well as inputs. The empirical pattern observed supports the hypothesis that correlation between plant size and price can be driven by market power.

TFP growth, technical efficiency and catch-up dynamics: Evidence from Indian manufacturing

Recent studies have shown that technical efficiency can be both persistent (long-term) and transient (short-term). However, their dynamics are under-examined compared to conventional technical efficiency. This study investigates the dynamics of both persistent and transient technical efficiencies and TFP growth in the Indian manufacturing sector. Using data on 10667 firms in 17 industries over 1999–2018, we employ a four-component stochastic frontier model to separate the persistent technical efficiency from the firm heterogeneity and the transient technical efficiency from the random noise. Results support the existence of both conditional and unconditional beta convergence in transient technical efficiency, indicating a catching-up by transiently inefficient firms. Convergence speed remains unaffected by firm characteristics; however, it slowed after the 2008-financial crisis. Results also show that with time persistently inefficient firms exit the market. Finally, the study investigates the drivers of TFP growth. We show that technical change and efficiency improvement drive the TFP growth.

Do innovations improve firm performance in the Indian manufacturing sector? A mediation and synergy effect analysis

PurposeThis study examines the effects of both technological and non-technological innovations on the overall performance of Indian manufacturing firms, and identifies the mediation and synergy effects in the relationship between innovation and performance.Design/methodology/approachThe study applies the partial least squares structural equation modelling (PLS-SEM) technique using Smart PLS3 on a combined data set from the World Bank Enterprise Survey and the follow-up Innovation Survey for India in 2014. Different newly developed statistical tests [PLS predict, importance performance map analysis (IPMA), multi-group analysis (MGA) and confirmatory tetrad analysis PLS (CTA-PLS)] have been used to check the robustness of the empirical results.FindingsThe results of the study suggest that technological innovations (product and process innovation) significantly affect a firm's overall performance, and that innovation strategy significantly mediates the effects, whereas the effects of non-technological innovations (marketing and organisational innovation) on a firm's performance are fully mediated by innovative performance. IPMA results suggest that technological innovations and their respective strategies are very important in improving a firm's performance, whereas non-technological innovations have great importance for increasing the innovative performance of the firms. The MGA results suggest that there are several distinctions in the path relationship and mediation effect among a firm's segment based on technology intensity and firm size. The study results do not find that innovation types have significant synergy effects on a firm's performance.Originality/valueThe study results suggest that managers should focus on technological innovations, along with their respective strategies to improve the overall performance of a firm, whereas non-technological innovations should be given priority for increasing the firm's innovative performance. Moreover, while making policy regarding innovation the people concerned should bear in mind which segment of the firms they are dealing with, as the effects differ across a firm's technology-intensity and size.