Beyond Size: The Rise in Power of the Transaction Sector in India Post-Liberalization
Keywords:Transaction sector - Liberalization - Social network analysis
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.
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
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
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
How to Cite
The author gives permission to Transition Academia Press to publish the article in print and/or electronic format.
If/when an article is accepted for publication, Author will be asked to transfer copyright of the article to Transition Academia Press. Transition Academia Press will retain copyright of all published material and reserves the right to re-use any such material in any print and/or electronic format. Author willing to retain their copyright from the Editors might request a fair condition, on the base of a bilateral agreement.