Does Investing in Technology Affect Exports? Evidence from Indian Firms (original) (raw)

2003, Review of Development Economics

https://doi.org/10.1111/1467-9361.00191

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Abstract

The U.S. Congress established the East-West Center in 1960 to foster mutual understanding and cooperation among the governments and peoples of the Asia Pacific region including the United States. Funding for the Center comes from the U.S. government with additional support provided by private agencies, individuals, corporations, and Asian and Pacific governments. East-West Center Working Papers are circulated for comment and to inform interested colleagues about work in progress at the Center.

Technology intensity of Indian merchandise exports

2009

In the light of substantive improvement in the India's export performance, this paper examines whether our exports have diversified to more technology intensive products. The analysis is focused mainly on merchandise export of India in the post liberalised period. The classification of merchandise export according to their technology intensity is based on OECD classification for the same. The analysis is done at 2-digit level for all commodities and at 3-digit level for some selected commodities. The study reveals that, India's Export is dominated by medium-low technology intensive commodities. Export of low technology intensive is still prominent, while medium-high technology is showing signs of improvement, especially in recent periods. India has still to go long way, before making a mark in export of high technology intensive commodities.

The impact of imported and domestic technologies on productivity : evidence from Indian manufacturing firms

RePEc: Research Papers in Economics, 2000

1 It may be noted that contrary to popular perceptions, the new framework does not provide an unambiguous theoretical underpinning to the notion that opening to trade increases the incentives of less developed country (LDC) firms to invest in innovations (see for example, Rodrik 1992, Young 1991). 2 There are a number of other channels as well. For example, case study evidence suggests that export activities by firms in LDCs lead to improvements in their technical efficiency as international buyers transmit technical assistance and knowledge to them. While a number of econometric studies purport to show the same, see Clerides, Lach, and Tybout (1996) for a critique of these studies. Spillovers of international knowledge represent yet another mechanism of drawing upon the international knowledge base. In principle, such spillovers do not have to be related to trade. In practice, however, even these are likely to depend on trade (Coe and Helpman, 1995). 3 For example, case studies by Scott-Kemmis and Bell (1988) and Desai (1988) examining the contractual purchase of foreign technology by Indian firms suggest that the importing Indian firms do not get enough technological know-how through the contracts. Although this evidence has been interpreted differently by various researchers, many have taken the case study evidence to be indicative of low returns from the import of technology. Indeed, even Arora (1996) who clearly believes technology transfer to be a potentially important source of technology and focuses on policies that would improve the efficiency of technology transfer is prompted to write that the "ability of Indian firms [engaged in arm's length import of technology] to assimilate, utilize, and improve

Exporting, access of foreign technology, and firms’ performance: Searching the link in Indian manufacturing

The Quarterly Review of Economics and Finance, 2018

This study tests the impact of export and foreign technology on the indicators of firm's performance for a sample of Indian manufacturing firms. To provide new insights into the debate over the linkage among export, technology, and performance, we employ several important performance indicators of firms, such as labor productivity, total factor productivity, product and process innovation, wage, size, and capacity utilization. For this study, we utilize a sample of firms from a recent Enterprise Surveys data of the World Bank on Indian manufacturing. The results of the analysis indicate that exporters are more productive and innovative. They are also large and utilize the capacity in a better way. The results further indicate that export leads to substantial performance gain for Indian firms. Similar results are also estimated for the effects of the use of foreign technology in the production process. Our findings also suggest that exporting products to the developed world have a significant effect on performance and further indicate that single product firms are more benefited from export and technology transfer than multi-product firms. It is also found that firms with more productivity decide to export their products; however, technology transfer is not a significant factor in making decisions about export or enhancing export-intensity. Overall, our analysis supports the argument that research and development (R&D) in the developed countries is an important source of technology for developing countries, and this takes place through export as well as direct technology transfer.

Eiciency , innovation , and imported inputs : determinants of export performance among Indian manufacturing irms

2017

This paper investigates the determinants of export behavior among Indian manufacturing firms, focusing in particular on the role of technology, cost and imported intermediate inputs. Our evidence suggests that innovation, in particular R&D, positively affects both firms’ probability to export and firms’ export volumes. We also find that imported intermediate inputs, incorporating foreign technology, play an important role in expanding export activities of firms. On the other hand, we find that higher productivity or lower unit labour costs are not systematically associated with the probability to enter export market, but they do positively affect export volumes. JEL codes: D22, F13, F14, L25, O33

An Empirical Study of the Impact of FDI, JVs and Trade on Domestic Technology Stock of India

Theoretical Economics Letters

This research is an effort to empirically understand the relationship among the three modes of International Technology Transfer (ITT)-1) Foreign direct investment (FDI), 2) joint ventures (JVs) and 3) trade. A common factor as representative of technology stock is derived using a number of scientific journal publications, engineering exports, number of trademark registered and patent filed in India by native as well as foreign applicants. A simple linear regression (using ordinary least square method) is conducted on the technology stock and foreign direct investment, joint ventures and trade indicators. Results represent that FDI, JVs and trade are affecting the domestic technology stock gain. SPSS 17  is used for factor analysis and transformation of indicators. EView6  is used to make data set stationary and run regression analysis.

Trade Liberalization and Technology Upgrading : The Case of Indian Firms 1

2016

Trade liberalization can force a firm to adopt new technologies. Exploiting India’s unilateral trade reform process in 1990s, I use firm level data on technology upgradation of the manufacturing firms to investigate the causal relation between the two. I find: drop in input tariffs significantly increases adoption of new technology only by big firms, conforming to Aghion et al. (2005). 10% drop in input tariffs induces on average 3–4.5% increase in expenditure on account of adoption of new technologies. This increase is significant for both R&D expenditure and foreign acquisition of technology; increase is higher by a factor of 1.5-3 for the latter. The pattern is acute for: (i) exporters and non-exporters; (ii) foreign and domestic firms; (iii) firms producing final goods. Finally, I look at patent claims, divided into product and process, to find that trade reform also significantly increases product patent filings by only the big firms.

The Determinants of East Asia’s Information Technology Trade

2004

Abstract This paper studies the growth and determinants of information technology (IT) trade in the Asia-Pacific region. We argue that the rise of IT trade must be understood within the context of increasing vertical fragmentation of production processes that has occurred in the last two decades. This has implications for the appropriate specification of empirical trade equations for IT products. We present results of pooled bilateral export equations for East-Asian IT exports where foreign direct investment plays a significant role in exports.

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This paper investigates the long-run relationship between labour productivity and employment, and between labour productivity and real wages in the case of the Indian manufacturing sector. The panel data set consists of 17 two-digit manufacturing industries for the period 1973-74 to 1999-2001. We find that productivity-wages and productivity-employment are panel cointegrated for all industries. We find that both employment and real wages exert a positive effect on labour productivity. We argue that flexible labor market has a significant influence on manufacturing productivity, employment and real wages in case of Indian manufacturing. JEL Codes: O47, O30, O53

Knowledge Sources and International Business Activity in a Changing Innovation Ecosystem: A Study of the Indian Pharmaceutical Industry

Management and Organization Review

ABSTRACTThe Indian pharmaceutical industry has experienced rapid growth, becoming the world's largest provider of generic drugs, based on product and process innovation. The industry has undergone dynamic changes in recent decades, operating in a rapidly evolving environment affected by domestic and global policies; a key example of the latter is the TRIPS agreement. Taking an intellectual property perspective, we describe how changes in the innovation ecosystem have affected companies’ strategies related to international activity and accessing knowledge from both internal and external knowledge sources, during the transitional- and post-TRIPS periods (1995–2004 and 2005–2014, respectively). Combining intellectual property arguments with contextual aspects of the innovation ecosystem, we conjecture that, in the post-TRIPS period, externally-sourced knowledge will be more important than internally-sourced knowledge, for Indian pharmaceutical firms’ international business activity.

Competitiveness, FDI and Technological Activity in East Asia

Research Policy, 2004

A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data Competitiveness, FDI and technological activity in East Asia / edited by Sanjaya Lall and Shujiro Urata. p.cm. "In association with thelnternational Bank for Reconstruction and Developmentffhe World Bank." Includes index. 1. Research. Industrial-Economic aspects-East Asia. 2. Technological innovations-Economic aspects-East Asia. 3. Investments, Foreign-East Asia. 4.

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Социология Науки И Технологий, 2011

Contemporary trade theories suggest association between technological capability and gains from export. Export structure of India and China with reference to the structure of US import suggests that higher Chinese gains cannot be explained by technological capability. When overall movement of US import is compared with that of shares of India and China, it appears that they have better share of the market during downswing. The trend is most pronounced in case of China. The paper off ers an explanation to the paradox by defi ning X-advantage that gives a country the advantage of downwardly fl exible factor price.

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The pattern of India's share of high and medium technology exports in total manufactured exports doesn't get reflected in worldexports of technology intensive exports.In this paper, by taking threesectors belonging to different technology-intensive categories (textiles, apparels & footwear, electronics & computer and motor vehicles),with increase in India's participation in Global Value Chain (GVC), the gross exports of these sectorshave increased but the ratio of backward participation to forward participation has also increased. However, when gross exports are further divided into intermediate and final goods, thecorrelationof theseexports with the ratio of Foreign Value Added (FVA) to Domestic Value Added (DVA) for the sectors concerned, comes out significantly negative. Thus, how much increase in domestic value addition can enable in further increase in exports and how India is able to leverage its participation in GVCs to become more efficient by maximising the income and benefits is the question which needs further analysis.

Export Innovation System: Changing Structure of India's Technology Intensive Export

This paper attempts to analyse India's changing structure of technology-intensive exports using a systemic perspective. In doing so, it explores the increasing significance of linkages between National and International System of Innovation. Technology-intensive exports from the developing economies have witnessed rapid growth and an increase in their share compared with low-tech or medium tech exports in international trade in the last two decades. India is no exception to this and has demonstrated a sharp increase in the manufactured exports of technology-intensive products. The paper examines the changing structure of exports and its link with economic development and whether technological learning affects low, medium and high-tech differently. Findings reveal that export performance can be enhanced through improving technological capabilities. However, it is not only codified knowledge in R&D output such as publications, patents and designs that influence technological learning and innovation process. Interactive processes of international collaboration, inward and outward foreign direct investments also contribute significantly towards this process.

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In a globally competitive scenario, countries relying significantly on exports of primary products face constraints in the long run development process. Negative trends in the secular terms of trade, uncertainty arising from price variability and the consequent fluctuating export earnings, difficulties in achieving economic diversification have all proven to be detrimental for such countries amid development challenges and low incomes. With the development process, there is a shift from natural resource based and low technology intensive exports to medium and high technology intensive exports. The paper seeks to capture the shift in the technology intensity of India's manufacturing exports in the post liberalized period. The study is based on the data extracted from UNCOMTRADE-WITS database (SITC REV-3). Further, OECD classification of manufacturing industries on technology intensity is taken into consideration. Using trade indicators (such as RCA) and regression model, the analysis reveals a steady, albeit slow shift from low technology intensive exports to medium-low technology intensive exports in India. Though improvement was marked for the medium-high technology intensive exports, dominance of low technology intensive exports still persists. The major factors for the persistence of low technology intensive exports are low level of R&D in manufacturing sector, lack of skilled personnel, relatively low level of FDI and competitiveness. However, in case of high technology intensive manufacturing exports, India still lags behind. The study highlights incentivizing high technology intensive export as a concern for the policy makers.

Export Innovation System: Changing Structure of India’s Technology-Intensive Exports

International Journal of Institutions and Economies, 2013

This paper attempts to analyse India’s changing structure of technology-intensive exports using a systemic perspective. In doing so, it explores the increasing significance of linkages between National and International System of Innovation. Technology-intensive exports from the developing economies have witnessed rapid growth and an increase in their share compared with low-tech or medium tech exports in international trade in the last two decades. India is no exception to this and has demonstrated a sharp increase in the manufactured exports of technology-intensive products. The paper examines the changing structure of exports and its link with economic development and whether technological learning affects low, medium and high-tech differently. Findings reveal that export performance can be enhanced through improving technological capabilities. However, it is not only codified knowledge in R&D output such as publications, patents and designs that influence technological learning ...

High Tech Competitiveness: Spotlight on Asia

Beginning in the late 1980's the Technology Policy and Assessment Center (TPAC) at Georgia Tech has been measuring the capability of nations to compete in technology-enabled exports. The resulting "High Tech Indicators" (HTI) contribute to the U.S. National Science Foundation (NSF) Science & Engineering Indicators. 1 Our focus has been on the rapidly industrializing countries; we include a number of highly developed countries as benchmarks.

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