Articles by Aditya Bhattacharjea

A comprehensive examination of predatory pricing in the Indian context is urgently required. The opening up of the economy provides greater scope for foreign firms to engage in aggressive price competition and for Indian firms to utilise laws against predatory pricing. The terms of such a confrontation will be set by a new competition policy which is now on the anvil. This article examines the law and economics of predatory pricing, especially in cases involving imports, and tries to draw lessons from theory and experience for the proposed new competition policy.

Brave New World of Global Commerce Aditya Bhattacharjea Developing Countries and the Multilateral Trading System: From the GATT to the Uruguay Round and the Future by T N Srinivasan; Oxford University Press, Delhi, 1998; pp 140, Rs 395.

Investment, Exports and Growth A Sceptical Note Aditya Bhattacharjea IN a recent paper in this journal, Athukorala (1996) has eriti ciscd the earlier contribution of Patnaik and Chandrasekhar (1996, hereafter PC). PC had contested the view that growth in developing countries can be explained by the "efficiency of resource use", by showing that the growth rates of GDP as well as exports could be substantially explained by theinvestment/GDPratioalone in cross-country regressions. Athukorala argued that such single-variable regressions were inadequate to establish the superiority of the 'investment' view over the 'resource allocation' view. He proceeded to show that even in the original PC data set, both the investment ratio and the growth rate of exports were significant in explaining growth, althoughfhecoefficient on the former was much less than that estimated by PC. Also, he showed that export growth in turn could be explained by the investment ratio and a dummy variable which distinguished between inward and outward-oriented countries thereby relating growth more directly to the policy regime. While there is merit in Athukorala's methodological criticism (and also that of Dubey 1996, with which I am not concerned), my purpose in this note is to show that his analysis is Hawed, and that in fact his own results as well as several other empirical studies show the explanatory rote of capital accumulation in growth to be more secure than that of trade-related variables.

Protection and Exports Aditya Bhattacharjea IN demonstrating that under certain circumstances tariffs protection can in fact promote exports by the protected industry, Marjit and Sarkar (1995; hereafter MS) have unwittingly rediscovered a result published by Bhagwati (1988) in a little-known paper. In Section I of this brief note, after restating their result. I summarise some of the important qualifications to this argument that Bhagwati pointed out, and add some caveats of my own. In Section II, I examine their parallc vestigation of the export- promoting effect of a quota, and point out that they have overlooked some crucial implications of their own analysis.

New theories of 'strategic' trade policy developed during the 1980s challenged economists belief in the optimality of free trade. However, influential critics soon dismissed the relevance of the new theories to practical policy, especially in developing countries. This paper argues that imports of developing countries are frequently supplied under conditions of imperfect competition, and that consequently the environment for strategic import policy exists. This is first illustrated by indirect empirical evidence, and then with reference to historical and institutional features of developing countries' import trade, reinterpreted in the light of modern theories of industrial organisation.