Friend or Foe or Family? A Tale of Formal and Informal Plants in India

Ghani, Ejaz ; O'Connell, Stephen D. ; Sharma, Gunjan

World Bank, Washington, DC

关键词: ACCOUNTING;    AGGLOMERATION EFFECTS;    BUSINESSES;    BUYER;    BUYERS;   

DOI  :  10.1596/1813-9450-6588
RP-ID  :  WPS6588

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper examines the interactionbetween formal (organized) and informal (unorganized) plantsin the manufacturing sector in India. How has the size andproductivity of the plants in the organized sector affectedthe plants in the unorganized sector? How have informalplants affected formal plants? Are the magnitudes of theeffects symmetric in either direction? The evidence showsthat there are positive horizontal and vertical spilloversin each direction. Informal firms are an important supplierof inputs to formal firms. Employment and output in theorganized sector is greater in those states in India thathave a greater presence of unorganized suppliers of inputs.Conversely, unorganized employment and output are greater instates that have a greater presence of organized buyers ofinputs. But there are two important asymmetries in therelationship between the organized and unorganized sectors.First, the unorganized sector is much more dependent on andresponsive to organized sector presence than vice versa.Second, unorganized sector productivity is dependent on andresponsive to organized sector productivity and presence butthe reverse is not true.