Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2009
  • Article
  • India Policy Forum

India Transformed: Insights from the Firm Level 1988–2007

By: Laura Alfaro and Anusha Chari
  • Format:Print
ShareBar

Abstract

Using firm-level data, this paper analyzes the transformation of India's economic structure following the implementation of economic reforms. The focus of the study is on publicly listed and unlisted firms from across a wide spectrum of manufacturing and services industries and ownership structures such as state-owned firms, business groups, and private and foreign firms. Detailed balance sheet and ownership information permit an investigation of a range of variables such as sales, profitability, and assets. Here we analyze firm characteristics shown by industry before and after liberalization and investigate how industrial concentration, the number, and size of firms of the ownership type evolved between 1988 and 2007. We find great dynamism displayed by foreign and private firms as reflected in the growth of their numbers, assets, sales, and profits. Yet, closer scrutiny reveals no dramatic transformation in the wake of liberalization. The story, rather, is one of an economy still dominated by the incumbents (state-owned firms) and, to a lesser extent, traditional private firms (firms incorporated before 1985). Sectors dominated by state-owned and traditional private firms before 1988-1990, with assets, sales, and profits representing shares higher than 50%, generally remained so in 2005. The exception to this broad pattern is the growing importance of new and large private firms in the services sector. Rates of return also have remained stable over time and show low dispersion across sectors and across ownership groups within sectors.

Keywords

Financial Statements; Management Analysis, Tools, and Techniques; Transformation; Economics; Ownership; Assets; Sales; Profit; Stock Shares; Private Sector; Investment Return; Manufacturing Industry; Service Industry; India

Citation

Alfaro, Laura, and Anusha Chari. "India Transformed: Insights from the Firm Level 1988–2007." India Policy Forum 6 (2009). (Also NBER Working Paper w15448. Featured in The Economist. Economics focus. "Dancing elephants. Is Indian capitalism becoming oligarchic?" Jan 27th 2011.)
  • Read Now

About The Author

Laura Alfaro

General Management
→More Publications

More from the Authors

    • 2025
    • Faculty Research

    Trade and Industrial Policy in Supply Chains: Directed Technological Change in Rare Earths

    By: Laura Alfaro, Harald Fadinger, Jay Schymik and Gede Virananda
    • 2025
    • Faculty Research

    Trade Within Multinational Boundaries

    By: Laura Alfaro, Paola Conconi, Fariha Kamal and Zachary Kroff
    • 2025
    • Faculty Research

    Bank Financing of Global Supply Chains

    By: Laura Alfaro, Mariya Brussevich, Camelia Minoiu and Andrea Presbitero
More from the Authors
  • Trade and Industrial Policy in Supply Chains: Directed Technological Change in Rare Earths By: Laura Alfaro, Harald Fadinger, Jay Schymik and Gede Virananda
  • Trade Within Multinational Boundaries By: Laura Alfaro, Paola Conconi, Fariha Kamal and Zachary Kroff
  • Bank Financing of Global Supply Chains By: Laura Alfaro, Mariya Brussevich, Camelia Minoiu and Andrea Presbitero
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.