We calibrate a two-sector span-of-control model and show that size-dependent labor regulations generate the observed employment distribution across manufacturing establishments in India. We find that such regulations in manufacturing reduce productivity in agriculture and impede the process of...

We examine whether trade openness influences government size. Using panel data, we find no evidence of a positive relationship. Rather, causality tests show that larger government size leads to lower openness, the opposite of what Rodrik [Rodrik, Dani, 1998, Why do more open economies have...