Foreign direct investment in India s retail sector and farmers productivity: few issues

Abstract

Productivity is generally defined as the amount of output realised for a given level of inputs. The neo-classical growth theory considers productivity as a function of technology and capital accumulation. In this paper, I argue that apart from technology and capital, productivity depends on institutional factors such as property rights, incentives, transaction, and information costs. Foreign direct investment in India s retail sector can bring in the best practices of supply-chain management and reduce transaction and information costs of input and output markets and thereby contributes to farmers productivity. I bring forth a few conceptual issues and qualitative empirics on this topic.