Increased competition due to de-reservation is not the only channel through which such a policy change may impact the gender segmentation in Indian manufacturing. Recent research reveals that de-reservation of products exclusively for SSI changed the evolution of product churning, which pushed firm productivity to a higher level (Tewari and Wilde, 2015). Prior to the reform, reservation of certain products for SSI constrained the ability of multiproduct firms to achieve their optimal product mix. However, once the policy was dismantled, there was a significant increase in product scope among formal firms in Indian manufacturing.<sup>25</sup> Product churning is thus an additional margin of reallocative activity, which, as in the case of trade liberalization, is likely going to have a gender dimension. If the de-reserved products were mainly unskilled labor intensive, for instance, then an expansion of product scope by formal and larger firms is likely going to increase their scale of production and thus have a positive impact on FEI. Gender segmentation, on the other hand, could move in either direction depending on the proportion of de-reserved products appropriated by female entrepreneurs and the skills required in producing these de-reserved products. Thus, our work also contributes to studies of business practices in small firms and economic advancement in developing countries (e.g., Ardagna and Lusardi, 2008; Schoar, 2009) Finally, our work is also related to and contributes to the literature on targeted policies that impact the social and economic well-being of women.<sup>26</sup> Political reservations for women in India,<sup>27</sup> for instance, have contributed much to investments in infrastructure or reallocation of public goods directly relevant to the needs of women (Chattopadhyay and Duflo, 2004; Duflo, 2005), creating public works employment for women (Ghani, Mani and O'Connell, 2013), lowering crime against women (Iyer et al., 2012) and encouraging entrepreneurship among women in the informal sector (Ghani, Kerr and O'Connell, 2014).<sup>28</sup> Our work builds on such studies of gender differences in entrepreneurship and employment (e.g., Estrin and Mickiewicz, 2011; Minniti, 2010; Minniti and Naudé, 2010; Rosenthal and Strange, 2012). This strand of research basically argues that activating half of a country’s potential workforce can be a significant driver of economic growth beyond promoting gender equality (Duflo, 2012; World Bank, 2011).

Nonetheless, despite significant economic advancement since liberalization, the role of women in the Indian economy still lags well behind that of advanced economies (e.g., Mammen and Paxson, 2000; World Bank, 2008, 2012). Cross-country data from the World Bank Entrepreneurship Snapshots find that India’s rates of business ownership (overall, and female-to-male ratio) and female labor force participation are lower than its stage of development would suggest. This dual

> 25 See Goldberg et al. (2010) for a study on the impact of trade liberalization and product scope among formal Indian manufacturing firms.

> 26 Examples include Mammen and Paxson (2000), Dhaliwal (2000), Mitra (2002), Ghosh and Cheruvalath (2007), Amin (2010), Field, Jayachandran and Pande (2010), Pillania, Lall and Saha (2010), Jensen (2010), Verheul, Stel and Thurik (2006), Bruhn (2009), Munshi (2011), Kobeissi (2010), and World Bank (2008).

> 27 See Pande and Ford (2011) for a comprehensive review of the literature on gender quotas.

> 28 Ghani, Kerr and O'Connell (2013) provide a spatial analysis of gender differences in entrepreneurship in Indian manufacturing, while Klapper and Parker (2011) provide a review of the literature on female entrepreneurship.

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