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Trade Liberalization, Technology Transfer and Firms’ Productive Performance. The case of Indian Manufacturing

Author

Listed:
  • Arup Mitra

    (University of Delhi)

  • Chandan Sharma

    (IIM Lucknow - Indian Institute of Management Lucknow)

  • Marie-Ange Véganzonès-Varoudakis

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique)

Abstract
India's economic liberalization in the 1990s provides scope for research on the effects of policy reforms on economic performance. This paper examines some of these policy changes and their impact on firms’ productivity and efficiency. We assess, specifically, the role of export and import (total, intermediate, and capital goods) as an outcome of trade liberalization, R&D, technology transfer, and infrastructure endowment over the period 1994–2008. Although our analysis may involve certain biases in capturing the causal relationships, results suggest that infrastructure is a crucial determinant of manufacturing performance in India. This is true for a wide range of variables, such as transport, energy, and information and communication technology (ICT). This finding has important policy implications in the Indian context, as several parts of the country are constrained by severe infrastructure shortages. Other empirical results concern knowledge transfers, which seem to materialize more through exports than imports. Our findings also suggest that R&D is not a productivity-enhancing activity in India and that firms rely more on purchase of foreign technology. This outcome does not come as a surprise because Indian firms are known for low in-house research and limited innovation-oriented activities.
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  • Arup Mitra & Chandan Sharma & Marie-Ange Véganzonès-Varoudakis, 2014. "Trade Liberalization, Technology Transfer and Firms’ Productive Performance. The case of Indian Manufacturing," Post-Print hal-02004594, HAL.
    • Handle: RePEc:hal:journl:hal-02004594
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    More about this item

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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