Free entry in the indian automobile industry: A calibration model

Paul E. Jensen, Kala Krishna

Research output: Contribution to journalArticlepeer-review


We examine the implications of free entry in the Indian automobile industry in a model that is calibrated to the Indian market using price, cost and production data from 1993 and 1994. In particular, we consider the effect that free entry has on prices, production levels and welfare. We have two main findings. First, that despite the experiences of other countries, free entry is a desirable policy in this market. Second, that the excise tax of 40 per cent levied on automobiles does not seem to have a major adverse impact on welfare.

Original languageEnglish (US)
Pages (from-to)437-455
Number of pages19
JournalJournal of International Trade and Economic Development
Issue number4
StatePublished - 1999

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development
  • Aerospace Engineering


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