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Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution, Boston University IED Working Paper no 266

Amirapu, Amrit and Gechter, Michael (2017) Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution, Boston University IED Working Paper no 266. Working paper. BU Economics, Boston,USA (KAR id:64329)

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Abstract

In this paper, we estimate the costs associated with a suite of labor regulations in India whose components have gone largely unstudied in developing countries. We take advantage of the fact that these regulations only apply to firms above a size threshold. Using distortions in the firm size distribution at the threshold together with a structural model of firm size choice, we estimate that the regulations increase firms’ unit labor costs by 35%. We document a robust positive association between regulatory costs and exposure to corruption, which may explain why regulations appear to be so costly in

developing countries.

Item Type: Monograph (Working paper)
Uncontrolled keywords: Boston University IED Working Paper #266
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Amrit Amirapu
Date Deposited: 10 Nov 2017 11:21 UTC
Last Modified: 04 Feb 2020 12:44 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/64329 (The current URI for this page, for reference purposes)
Amirapu, Amrit: https://orcid.org/0000-0001-9922-9363
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