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The liberalization initiative commenced in India from 1991 onwards, replacing the four-decade long import substitution policy. The primary objective was to enhance the role of foreign and private investment, in line with the newly embraced outward-oriented growth model. The government had undertaken several policy initiatives since then, especially to strengthen the manufacturing sector which plays an important role in the economic development of any country. The current study evaluates the effects of the liberalization policy in India on industrial outcomes. Recent studies have found that when firm heterogeneity is present in trade models, reforms will lead to a decrease in the number of firms and a rise in their average size (Melitz, 2003). A dataset of 24 manufacturing industries had been used in the current study. We test empirically whether liberalization had led to a rise in the average size of establishments as stated in the literature. We also attempt to analyze the magnitude of trade costs in terms of the impact of reforms on wages and prices. The empirical analysis based on the difference-in-difference (DID) estimation method shows that on average, trade reforms do not lead to an increase in the real wages and average size of establishments. In addition, prices appear to increase in the long run due to liberalization, with potential ramifications.

In this chapter, the author considers a three-sector general equilibrium model in the context of a developing nation to find out the impact of an increase in foreign capital inflow on the welfare level of the nation. Comparative static analysis reveals that an increase in the inflow of foreign capital causes redistribution across the factors of production and a reallocation of resources, reflected through the change in output. Moreover, the author considers the case of technology transfer and proves that an increase in foreign capital inflow makes the country better off in terms of social welfare even if the foreign capital is fully repatriated. Hence, this work shows that in the absence of any trade distortion, a partial investment liberalisation causes a welfare gain for a small open economy.

Asia has emerged as the fastest growing economic region in the world at present. The region is endowed with 60% of global population with a huge market size, making the region an attractive destination for trade to the countries around the world. In 2017, almost 38% of global import was made solely by this region. Among the Asian countries, India has been able to establish itself as a consistent performer in trade during last three decades. The volume of its global trade (export + import) has increased remarkably by more than 32 times (from 33.22 billion USD in 1988 to 1,081.36 billion USD in 2017) within this period. India's trade with its major Asian partners has gone through a considerable change in its volume, direction, nature, and composition in the period of trade liberalization. Both export and import have increased manifold during this period with a faster increment in imports over its exports, resulting a huge trade deficit of 109.36 billion USD in 2017. Undoubtedly, it is a matter of concern for India. The present study is an attempt to evaluate the changes in pattern of India's trade, volume of export and import, and balance of trade with other Asian countries in the context of changes in trade policy, tariff rates, exchange rates, FDI, and economic growth during 1988 to 2017.

This chapter focuses to study the aspect of dynamic profitability of the Indian computer industry in the post tariff rationalization period, i.e., complete elimination of tariff on imported computers parts and component after implementation of Information Technology Agreement (ITA) in 2004. If trade liberalization affects profitability, then it also interrupts the firm's financial structure because a firm reduces its short-run debts when it generates huge profit. On the contrary, higher marginal return or profitability of asset encourages the debtor to invest more. In fact, trade liberalization may affect investment through marginal profitability of asset by varying projected sales and costs of imported inputs, i.e., by altering the imported input price. This study examines the viable relationship between dynamic profitability and directives of the ITA. The sample selected from 51 Indian computer firms (14 hardware firms and 37 software firms) level data ranging from 2000–2001 to 2018–2019 and by application of dynamic panel data, the results are analyzed in this research work. This chapter observes that return on asset is negatively significant with the ratio between short-term liability and total liability for both the software and hardware sector of Indian computer industry in post-ITA policy timeline.

Increasing trade liberalization and financial integration with rise in foreign direct investment (FDI) flows have an intense impact on the labor market of both the developed as well as the developing world. The restructuring of economic activity has resulted in destruction of jobs in some parts of the economy and start-ups of new firms in the other part, growing import competition with foreign firms displacing local firms, relocation of jobs from high wage to low wage nations. It is claimed that rapid globalization has also the outcome of “race to the bottom” in terms of wages and the quality of employment. As per the latest International Labor Organization (ILO) Global Employment Trends, 2022, total global number of unemployed youths is estimated to reach 73 million in 2022 but still six million above the prepandemic level of 2019. The latest press release October 2022 points out that trade growth is likely to experience a slowdown in 2023 due to multiple shocks on global economy. High energy prices due to the Russia–Ukraine war is expected to contract household expenditure and raise the cost of manufacturing. The present chapter seeks to analyze the impact of trade flows on the labor market – job creation or job loss, wage inequality, movement toward informal economy, gender inequalities, and other related issues. The data are based on various reports available from the ILO, the World Development Indicators (WDI) and the United Nations Conference on Trade and Development (UNCTAD), and World Trade Oorganization (WTO) Trade Reports. The empirical analysis also confirms that there is a unidirectional causality from trade to employment generation.

The context of skill creation and its development is fundamental to sustainable economic growth with vertical improvement in well-being. Now when it comes to the case of less developed countries, the implication of international trade in skill formation takes an idiosyncratic shape so far as our concern: a dearth of skill education and lack of evenness in access to skill education due to the underlying rampant and pronounced economic inequality (i.e., inequality in income and wealth) among people as what is quite typical. Against this backdrop, this chapter seeks to develop a general equilibrium model in line with Jones (1965 & 1971) and Beladi and Marjit (1996) to address how leveraging of foreign trade through technological modernization of exports may work toward skill formation in less developed economies with technological dualism, informalization, and disguised unemployment. Besides, this chapter brings to glare how benefit of such modernization toward skill development stands out to be weighed against a potential worsening of distributive justice in terms of rise in wage gap between skilled and unskilled workers. Moreover, this chapter seeks to overhaul the implication of liberalization of labor market in terms of dilution of minimum wage standard for human development. Thus, the bottom line is that comes up here forth that export modernization in name of improving external competitiveness and thereof attaining effective trade openness can promote skilled human but only risking an exacerbation of wage inequality.

This chapter is devoted to sustainable human resource management that leads to sustainable competitiveness. It features the ways human resources can be managed to carry out sustainable goals and the impact of sustainability on employees' attitudes and behaviours. The aim of this study is to explore the complex objectives of sustainability and human resource management and empirically investigate the dynamic relationship between human resources in science and technology and sustainable competitiveness in the case of 35 European countries. Our contribution emphasizes this interrelationship and its causality. For this research, we applied a vector auto-regression (VAR) model, and the Granger causality method to examine the relationship between human resources in science and technology and sustainable competitiveness. A panel data included 314 observations between 2012 and 2021. The panel VAR for analysing the impulse response function was enriched with the 5% and 95%, using Monte Carlo simulations. The research results revealed bidirectional causality in the European countries between human resources in science and technology and sustainable competitiveness. Human resources in science and technology trigger sustainable competitiveness and vice versa. As an element of originality, our study demonstrates that human resources in science and technology contribute to sustainable performance, and, on the other hand, a more competitive and sustainable environment contributes to the development of human resources in science and technology. Thus, the chapter outlines the role of human resources in science and technology with regard to sustainable human resource management (HRM), and how to navigate these objectives so that they can positively influence sustainable competitiveness.

This chapter aims to critically analyse the implications that the national protectionist policies have on the global supply and value chains and the relocation of production. The analysis is based on the assumptions that the global economy is facing the possibility of decoupling of many trade connections, and this trend favours de-globalisation processes that have long been promoted by populism, nationalism and economic protectionism. It is concluded that global supply, production and value chains although being economically efficient are no longer any more secure under national protectionist policies, and therefore, the relocation of production processes is mainly due to the increase in the level of income and wages of the developing countries that are the destination and which reduce the advantages to relocate.

There is growing empirical evidence that firm heterogeneity is technologically non-neutral. This chapter extends the Gandhi, Navarro, and Rivers (2020) proxy variable framework for structurally identifying production functions to a more general case when latent firm productivity is multi-dimensional, with both factor-neutral and (biased) factor-augmenting components. Unlike alternative methodologies, the proposed model can be identified under weaker data requirements, notably, without relying on the typically unavailable cross-sectional variation in input prices for instrumentation. When markets are perfectly competitive, point identification is achieved by leveraging the information contained in static optimality conditions, effectively adopting a system-of-equations approach. It is also shown how one can partially identify the non-neutral production technology in the traditional proxy variable framework when firms have market power.