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The authors use the World Bank Investment Climate Surveys data to analyze the employment of both labor and capital in Indian manufacturing. They focus on disparities among states in manufacturing employment patterns, and provide reduced form evidence of their relationship to both institutional constraints, and productivity. There has been some concern with the lack of growth, particularly of employment growth, in Indian manufacturing, and its relationship to various institutional constraints. Partly this is a result of the fact that the Indian manufacturing sector is much smaller than that sector in other economies of similar size.
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