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Foreign Direct Investment And Technology Spillover-- An Evaluation Across Different Clusters In India

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Author Info

  • Pami Dua

    (Department of Economics, Delhi School of Economics, Delhi, India)

  • B. N. GOLDAR

    (V.K.R.V. Rao Centre for Studies in Globalization Institute of Economic Growth Delhi)

  • SMRUTI RANJAN BEHERA

    (Department of Economics Shyamlal College, University of Delhi,Delhi)

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Abstract

The paper attempts to explore the technology spillover effects of Foreign Direct Investment (FDI) in Indian manufacturing industries across different selected clusters in India. To measure the spillover effect to domestic firms in a particular cluster, a model is used that combines an innovative production function with a conventional production function. The model parameter estimates provide an evaluation of the technology spillovers in a cluster and the inter-cluster spillovers taking place in various regions. The empirical findings reveal significant variations across clusters in regard to spillovers. While some clusters benefit from foreign firm presence and technological stock within the cluster, a more commonly observed pattern is that domestic firms in a cluster gain from the presence of foreign firms in other clusters of the region and spillovers from technological stock in the regions. In some clusters, productivity enhancing effects of investment climates is visible, but in several others there is no such effect.

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Bibliographic Info

Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 200.

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Length: 34 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:cde:cdewps:200

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Keywords: Foreign Direct Investment; Technology Spillover; Clusters; Firm location;

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