India's Services Sector Growth : The Impact of Services Trade on Non-tradable Services
This paper examines the effect of tradable services growth on non-tradable services across Indian districts. The analysis uses a shift-share “Bartik-type” instrumental variable, which relies on changes in foreign demand shocks for tradable services, weighted by the initial district employment shares in tradable services. Using multiple rounds of the Indian Economic Censuses, the findings show that an increase in tradable services employment leads to an increase in non-tradable services employment and increases the number of firms in non-tradable services. The evidence suggests that this positive impact is due to an increase in consumer demand for local non-tradable services that results from the growth in tradable services employment, and not due to sectoral linkages between tradable and non-tradable services sectors. The employment impact is much larger for female workers compared to male workers, and for the number of female-owned firms relative to male-owned firms. Further, the employment impact is only significant for small non-tradable service firms.
| Main Authors: | , , , |
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| Format: | Working Paper biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2022-06
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| Subjects: | TRADABLE SERVICES, NON-TRADABLE SERVICES, FOREIGN DEMAND SHOCKS, SERVICE SECTOR, FEMALE EMPLOYMENT, EMPLOYMENT, INDIAN ECONOMIC CENSUSES, SMALL SERVICE FIRMS, ECONOMIC GROWTH STIMULATION, |
| Online Access: | http://documents.worldbank.org/curated/en/099255006212237589/IDU058da6a290035604fc4081820c85c365125c4 http://hdl.handle.net/10986/37590 |
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| Summary: | This paper examines the effect of
tradable services growth on non-tradable services across
Indian districts. The analysis uses a shift-share
“Bartik-type” instrumental variable, which relies on changes
in foreign demand shocks for tradable services, weighted by
the initial district employment shares in tradable services.
Using multiple rounds of the Indian Economic Censuses, the
findings show that an increase in tradable services
employment leads to an increase in non-tradable services
employment and increases the number of firms in non-tradable
services. The evidence suggests that this positive impact is
due to an increase in consumer demand for local non-tradable
services that results from the growth in tradable services
employment, and not due to sectoral linkages between
tradable and non-tradable services sectors. The employment
impact is much larger for female workers compared to male
workers, and for the number of female-owned firms relative
to male-owned firms. Further, the employment impact is only
significant for small non-tradable service firms. |
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