Domestic Competition Spurs Exports: The Indian Example

Author/Editor:

Tushar Poddar

Publication Date:

September 1, 2004

Electronic Access:

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Summary:

India's exports nearly tripled in the 1990s. Decomposing export growth shows that it has been driven by incumbent firms rather than the entry of new firms. By using a new panel on Indian firms and estimating a dynamic discrete-choice model of the firm's decision to export, we find evidence that economic liberalization has led to greater domestic competition, spurring firm efficiency and increasing Indian firms' competitiveness and ability to export. We show that export growth has been an outcome of local firm innovation which has come about due to increased competitive pressure from FDI entry.

Series:

Working Paper No. 2004/173

Subject:

Balance of payments Economic sectors Export performance Exports Foreign direct investment International trade Production Productivity Transnational corporations

English

Publication Date:

September 1, 2004

ISBN/ISSN:

9781451858662/1018-5941

Stock No:

WPIEA1732004

Pages:

29

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