Domestic Competition Spurs Exports: The Indian Example
September 1, 2004
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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.
Subject: Balance of payments, Economic sectors, Export performance, Exports, Foreign direct investment, International trade, Production, Productivity, Transnational corporations
Keywords: business house, Competition, East Asia, export behavior, Export performance, Exports, FDI, firm characteristic, firm ownership, firms entering, Foreign direct investment, India, joint venture, market share, MNC export activity, Productivity, public sector firm, state-industry MNC export, Transnational corporations, WP
Pages:
29
Volume:
2004
DOI:
Issue:
173
Series:
Working Paper No. 2004/173
Stock No:
WPIEA1732004
ISBN:
9781451858662
ISSN:
1018-5941
