Publisher:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft, Kiel, Hamburg
Abstract:
This paper uses a rich firm-product panel data set of Indian manufacturing firms to analyze the relationship between import competition and vertical integration. Exploiting exogenous variations from changes in India's trade policy, we find that import competition induced by falling output tariffs increases vertical integration by domestic firms, with the effects concentrated in rather homogenous product categories, among firms that mainly operate on the domestic market and in larger firms.