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Analysing trade flows and industrial structure of India: the question of data harmonisation
Guide to using available data to undertake empirical economic research on trade and industry in India
Authors:
C. Veeramani
Publisher:
Centre for Development Studies, Kerala, India, 2001
This paper is intended to provide useful guidance for undertaking empirical research in the area of India’s international trade and industrial sector. It does so in the absence of a database covering information on trade flows, industry and firm characteristics which the author argues is an important requirement for the analysis of trade flows in relation to domestic industrial structure. The paper attempts to provide alternative means of undertaking such studies.
The paper starts with an illustrative discussion of the research issues pertaining to international trade in relation to domestic industrial structure in the context of liberalisation. It then attempts a critical assessment of the various data sources available on India’s international trade and industrial sector and deals with the harmonisation of data related to trade, industry and firm characteristics.
The paper highlights the advantages of choosing the following specific sources of data:
- publications of the Directorate General of Commercial Intelligence and Statistics (DGCI&S) which provide data on India’s foreign trade
- Annual Survey of Industries (ASI), which provides data on industry Characteristics
- the electronic data base ‘Prowess’, which provides data on firm characteristics
The paper argues that data harmonisation, entailing two stages, need to be attempted in order to produce a comprehensive and consistent database. First, trade data at various levels of disaggregation from the DGCI&S have to be matched with data on industrial characteristics at 3-digit level of NIC. Regarding this, one may depend on the concordance table prepared by Debroy and Santhanam (1993). In the second stage, Prowess data at various levels of disaggregation need to be matched with NIC 3-digits.
The paper presents a concordance table (for selected manufacturing sectors), wherein the NIC items are matched with the industry categories in Prowess. The appropriateness of the concordance table was evaluated by comparing industry wise data on value of output and total emoluments as reported in ASI and in Prowess. It was shown that the extent of data coverage in the Prowess is quite good, excepting in those industries where the small-scale operations are dominant. The exercise provided some evidence to establish the credence of the concordance table.
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