Free entry in the indian automobile industry: A calibration model

Paul E. Jensen, Kala Krishna

Research output: Contribution to journalArticle

Abstract

We examine the implications of free entry in the Indian automobile industry in a model that is calibrated to the Indian market using price, cost and production data from 1993 and 1994. In particular, we consider the effect that free entry has on prices, production levels and welfare. We have two main findings. First, that despite the experiences of other countries, free entry is a desirable policy in this market. Second, that the excise tax of 40 per cent levied on automobiles does not seem to have a major adverse impact on welfare.

Original languageEnglish (US)
Pages (from-to)437-455
Number of pages19
JournalJournal of International Trade and Economic Development
Volume8
Issue number4
DOIs
Publication statusPublished - Jan 1 1999

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All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development
  • Aerospace Engineering

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