The present study discusses the short- and long-run trade patterns of India and China. Applying revealed comparative advantage (RCA) and bilateral RCA, this study specifically tries to find out the pattern of exports and areas of specialization of the economies under study. Major findings suggest that both the countries have been performing well, in terms of merchandise trade exports, over the past few decades, especially since 2000. The export-performing behaviour of India and China with each other, as well as with the world, is seen quite general in nature. In other words, irrespective of their institutional and structural differences, both India and China maintain almost the same upward moving trend with respect to the flow of exports between them and that with the world market. However, once we go from Standard International Trade Classification (SITC) two-digit to SITC four-digit level of analysis, the sample economies reveal their specialized products. At the disaggregate level, India’s export basket is void of food products and raw materials, and it generally contains engineering goods and technologically driven products as advantageous products. The study finds that the areas of specialization are much wider, and the technology-embedded products are larger for China as compared to India. JEL: F10, F11, F43

With state‐level panel data from the Indian manufacturing sector for 2000–12, and labour turnover as a proxy for employment adjustments, the authors estimate differential effects of demand shocks on employment adjustment across states with high and low levels of EPL. They find that EPL does not hinder employment adjustment; the response of labour separation rates to negative demand shocks is relatively higher in states with high levels of EPL, and labour turnover is inversely associated with EPL, which may be viewed as indicative of the beneficial effects of EPL for both enterprises and workers.

The critics of pro-worker labor laws argue that employment protection legislation (EPL) hurts productivity and employment generation by creating rigidity in employment adjustments. The discourse on labor market rigidity has taken center stage in this neoliberal phase of the global economy and is now being echoed by the state as well. However, the sharp growth in informal employment over the last two decades, cutting across developing as well as developed countries, puts a question mark over the tenability of the "flexibility thought" invoked by employers while demanding abrogation of job security legislation. In this study, we argue that there exists a substantial flexibility in contemporary labor markets. Using a panel dataset on twenty-eight industrial sectors across thirteen major states of India for the period 1999-2000 to 2007-2008, we find that EPL does not affect total factor productivity of industries. The impact of EPL is not significant even in highly volatile industries. The paper underlines the failure of the state to translate EPL into meaningful job security. The findings of this study suggest that the debates on labor regulations must be expanded to bring into its focus the issues of growing informalization and its consequences on workers.

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Labour law is widely being cited as one of the principal factors creating rigidities in industrial business and, thereby, holding back productivity growth and employment generation. However, a substantial chunk of literature disputes the "rigidity argument" on the ground that there has been a sharp growth in informal employment, which is often considered as flexible labor input as it does not fall under the purview of what is believed to be directly related with rigidity -employment protection legislation (EPL). However, given empirical evidence showing that informal worker is less productive as compared to its formal (regular) counterpart, the question arises: what motivates the employer to employ less productive worker? Using three-dimensional panel data on 28 industrial sectors between 1999-2000 and 2007-2008 across 13 states of India, our results show that the incidence of informal employment is directly linked with EPL, volatility, and labor bargaining power. We utilize instrumental variable two stage least square (IV 2SLS) to overcome the endogeneity issues. The results are robust.