Beyond Size: The Rise in Power of the Transaction Sector in India Post-Liberalization

Authors

  • Rahul Nilakantan Gokhale Institute of Politics & Economics, Pune, India
  • Deepak Iyengar Deepak Iyengar Department of Finance and Supply Chain Management, College of Business and Economics, Central Washington University, Ellensburg

DOI:

https://doi.org/10.14665/1614-4007-22-2-001

Keywords:

Transaction sector - Liberalization - Social network analysis

Abstract

The macro literature on transaction costs has hitherto focused only on the
input side while assessing the importance of the transaction sector. This ignores the nature of services provided by the sector to facilitate exchange in the economy. We use the tools of Social Network Analysis as well as Indian Input-Output tables to examine the magnitude, direction (both input as well as output), and network structure of the pattern of resource exchanges between the transaction sector and the rest of the 
Indian economy in the post-liberalization era. We find that although resource use by
the transaction sector is increasing over time, the sector is relatively isolated from the
rest of the economy on the input side, indicating a lack of importance from a network
perspective. In contrast, the transaction sector is highly integrated with the rest of
the economy on the output side. Further, there is a high level of dependence of other
sectors on the transaction sector to conduct resource exchanges. Increasing network
density is accompanied by a simultaneous decentralization of the economy, supported
by the rise in importance of the transaction sector on the output side.

Downloads

Download data is not yet available.

References

Borgatti SP, Everett MG (1992) Notions of Positions in Social Network Analysis. Sociol Methodol 22:1-35

Borgatti SP, Everett MG, Freeman LC (2002) UCInet for Windows: Software for Social Network Analysis.

Analytic Technologies, Harvard

Borgatti SP, Foster PC (2003) The Network Paradigm in Organizational Research: A Review and Typology.

J Management 29:991-1013

Borgatti SP, Li X (2009) On social network analysis in a supply chain context. J Supply Chain Management

:5-22

Brass DJ (1984) Being in the Right Place: A Structural Analysis of Individual Influence in an Organization.

Administrative Sci Q 29:18-39

Brass DJ (1985) Men’s and Women’s Network: A Study of Interaction Patterns and Influence in an Organization.

Acad Management J 28:327-343

Brass DJ (1992) Power in Organizations - A Social Network Perspective. In: Moore G, Whitt JA (eds) Research

in Politics and Society. JAI Press, Greenwich, pp 295-323

Brass DJ, Burkhardt ME (1993) Potential Power and Power Use - An Investigation of Structure and Behavior.

Acad Management J 36:441-470

Burkhardt ME, Brass DJ (1990) Changing Patterns or Patterns of Change: The Effect of a Change in Technology

on Social Network Structure and Power. Administrative Sci Q 35:104-127

Casciaro T, Piskorski MJ (2005) Power Imbalance, Mutual Dependence and Constraint Absorption: A Closer

Look at Resource Dependence Theory. Administrative Sci Q 50:167-199

Chobanov G, Egbert H (2007) The rise of the transaction sector in the Bulgarian economy. Comp Econ Stud

:683-698

CSO (1997) Input-Output Transactions Table 1989-90. Central Statistical Organization, Ministry of Planning

and Programme Implementation, Government of India, New Delhi

Dagnino-Pastore JM, Farina PE (1999). Transaction costs in Argentina. In: Third Annual Conference of the

International Society for New Institutional Economics. Washington DC, pp 1-33

Datta SK, Chakrabarti M, Nilakantan R, Datta SC (2011) How Does the Transaction Sector Move in Relation

to the Transformation Sector during a Development Process? Insights from India’s Post-Independence

Experiences. In: conference on Advances in Development Economics. Los Angeles

Davis L (1986) Comment. In: Engerman S, Gallman R (eds) Long Term Factors in Economic Growth. University

of Chicago Press, Chicago and London, pp 149-161

Dollery B, Leong W (1998) Measuring the Transaction Sector in the Australian Economy 1911-1991. Australian

Econ Hist Rev 38:207-231

Emerson RM (1962) Power-Dependence Relations. Am Sociol Rev 27:31-41.

Fombrun CJ (1983) Attributions of Power Across a Social Network. Hum Relations 36:493-508

F2o1mbrun CJ (1986) Structural Dynamics Within and Between Organizations. Administrative Sci Q 31:403-

Freeman LC (1979) Centrality in Social Networks: Conceptual Clarification. Soc Networks 1:215-239

Freeman LC, Roeder CD, Mulholland RR (1980) Centrality in Social Networks: II. Experimental Results.

Soc Networks 2:119-141

Ghertman M (1998) Measuring macro-economic transaction costs: a comparative perspective and possible

policy implications. In: Second Annual Conference of the International Society for New Institutional Economics,

Paris, pp 1-20

Iyengar D, Rao S, Goldsby TJ (2012) The Power and Centrality of the Transportation and Warehousing Sector

within the US Economy: A Longitudinal Exploration Using Social Network Analysis. Transp J 51:373-398

Kotwal A, Ramaswami B, Wadhwa W (2011) Economic Liberalization and Indian Economic Growth:

What’s the Evidence? J Econ Literature 49:1152-1199

Pfeffer J (1981) Power in Organizations. Pitman, Marshfield

Wallis JJ, North D (1986) Measuring the Transaction Sector in the American Economy, 1870-1970. In:

Engerman SL, Gallman RE (eds) Long-Term Factors in American Economic Growth. University of Chicago

Press, Chicago, pp 95-162

Wang N (2007) Measuring Transaction Costs: Diverging Approaches, Contending Practices. Div Labor

Transaction Costs 2:111-146

Wasserman S, Faust K (1994) Social Network Analysis - Methods and Applications. Cambridge University

Press, New York

Published

2015-12-23

How to Cite

Nilakantan, R., & Deepak Iyengar, D. I. (2015). Beyond Size: The Rise in Power of the Transaction Sector in India Post-Liberalization. Journal Transition Studies Review, 22(2), 3-19. https://doi.org/10.14665/1614-4007-22-2-001

Issue

Section

Papers