Productivity and Size of Firms: Evidence from Indian Manufacturing

This study makes an attempt to analyze the role of firm's size in productivity variation for a large sample of Indian manufacturing firms. For empirical analysis, I utilize a recent survey on the Indian manufacturing, which covers across size, industries and regions of firms. Our results suggest that large size firms have 9-11 percent productivity premia over other sized firms. Also, smaller firms are significantly inferior in terms of productivity performance in comparison to other sized firms. Furthermore, I also find some effects of trade intensity on the productivity of firms, yet, this effect is not found to be quite sizable. Overall, results show a robustness in estimated effects.