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well I've always been interested in the role of government policies in promoting
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uh well-being so India in particular is an interesting case because there have been extensive regulatory changes and
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policies to try to make people better off but the kinds of regulations that India has directed towards small and
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medium Enterprises are typical of the kinds of policies that many countries actually have for their small and medium
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firms so it's a more General and important question so the key findings for This
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research which as you mentioned is co-authored with uh Shanti nataraj and Leslie Martin the key finding of that
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research is that the promotion of small and medium Enterprises by reserving certain
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products only for them didn't have the expected results so the idea behind the
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Indian government's policies which were known as smallscale reservation was to
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take a large number of products maybe thousand products and only small and medium Enterprises could produce them um
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so this was tried to Foster these small firms so it was expected that by removing those policies which the Indian
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government did in the 2000s they got rid of all of them we would have thought that actually firms would suffer and
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wouldn't grow as quickly the result is quite surprising what the result shows
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is that on net employment and wages actually grew faster once these restrictions were
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removed what our research shows is that employment generation is really um focused on either young firms New firms
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or larger Enterprises and you might wonder why is it that employment is being generated in India by these
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younger firms or these larger firms when conventional wisdom suggests that it would be small and medium Enterprises
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would be the source of of growth well we think that the reason we're getting
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these unexpected findings is because um essentially young firms are really the key innovators in India probably in
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other countries as well and so it's youth that's really important and also larger firms have the
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connections needed to enter the market they have the connections needed to be able to access Capital knowledge and a
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well educated worker so when you think about it it actually seems almost obvious in the end that it's the young
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larger firms that are more likely to generate employment growth we think that our research really
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has much broader applications although of course India is an extremely important country we think this research
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is also relevant to many other countries including countries like the united states and countries like France and
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many other countries which really promote small and medium Enterprises uh so in fact we know that
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this research is relevant because our research is also linked to other Recent research that's been done for example in
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the United States by John Al Wanger at the University of Maryland his research along with his co-authors also shows
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that in the US case it's the younger larger firms that are generating more employment the advantage of our research
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is that we actually have what's called a natural experiment the elimination of a
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regulatory framework which allows us to look at before and after which uh other researchers have not been able to
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exploit to understand um this problem so the policy implications are that if you want to promote employment
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growth then restricting the product the the production of certain goods for certain size firms is not the way to go
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the way to go would be to encourage entry by younger firms um or to encourage larger Enterprises and that's
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more likely to yield the kind of outcomes that governments are looking for for so there's a perception among
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economists among policy makers that that small is beautiful what our research suggests is that that is clearly not the
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case if you're trying to maximize employment growth if you want to maximize employment growth you really
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want to focus on the younger firms but that's not to say we shouldn't be
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promoting small and medium Enterprises the best way to promote them is basically not to discriminate against
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them so don't make it harder on small and medium Enterprises to enter in because we want new Enterprises but
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explicit policies to encourage being small are not a good idea so tax holidays that are only focused on small
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and medium Enterprises for example are not a good way to go that's what our research
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suggests so I'm very excited about uh an ongoing research project also on India
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where we are looking at the effects of hundreds of regulations to try to improve the environment in India there
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have been many different regulatory changes some of them mandated by the Supreme Court others done at the state
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and local level and we're particularly interested in trying to identify what
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kinds of changes uh either through regulations or price changes can make firms behave in a cleaner more
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environmentally friendly way um so that's our that's our ongoing uh project
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uh on India I'm also doing a number of other research projects on China looking
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in particular at the success of their industrial policies which is an area that I find uh particularly important
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