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Multiplying multi-plants: A new and consequential phenomenon

Author

Listed:
  • Anand, Abhishek
  • Subramanian, Arvind
  • Thomas, Naveen Joseph

Abstract

Nearly all the literature using the Annual Survey of Industries (ASI) data in India has overlooked or not seriously incorporated the phenomenon of multi-plants, whereby a firm sets up multiple production facilities within a state. We show that multi-plants have grown dramatically over time, now accounting for 36 percent of employment in large firms (greater than 200 workers). The multi-plant phenomenon is important because it changes our understanding of the evolution of the size of large firms: contrary to recent research we find that accounting for multi-plants shows that large plants have not grown in size (and may even have shrunk) despite increasing recourse to contract labour. More broadly, any literature that focusses on firm size distribution without accounting for the multi-plant phenomenon is prone to measurement error.

Suggested Citation

  • Anand, Abhishek & Subramanian, Arvind & Thomas, Naveen Joseph, 2025. "Multiplying multi-plants: A new and consequential phenomenon," Journal of Development Economics, Elsevier, vol. 174(C).
    • Handle: RePEc:eee:deveco:v:174:y:2025:i:c:s0304387825000069
    DOI: 10.1016/j.jdeveco.2025.103455
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    More about this item

    Keywords

    Plant size distribution; Multi-plants; Productivity; Regulatory risk;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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