@workingpaper {19804,
	title = {Entry Liberalization and Inequality in Industrial Performance},
	year = {2004},
	abstract = {Industrial delicensing which began in 1985 in India marked a discrete break from a past of centrally planned industrial development. Similar liberalization episodes are taking place across the globe. We develop a simple Schumpeterian growth model to understand how {\"O}rms respond to the entry threat imposed by liberalization. The model emphasises that {\"O}rm responses, even within the same industrial sector, are likely to be heterogeneous leading to an increase in within industry inequality. Technologically advanced {\"O}rms and those located in regions with pro-business institutions are more likely to respond to the threat of entry by investing in new technologies and production processes. Empirical analysis using a panel of 3-digit state-industry data from India for the period 1980-1997 con{\"O}rms that delicensing led to an increase in within industry inequality in industrial performance.
},
	author = {P. Aghion and R Burgess and S Redding and F Zilibotti}
}
