Sri Lanka was the earliest South Asian economy to introduce economic reforms to attract export-oriented FDI. The rise of clothing production for export, apparently mainly driven by foreign firms, is regarded as a major outcome of the reforms. This paper seeks to examine a range of factors underlying firm-level export and technological performance. Econometric analysis (based on a large dataset of 205 clothing enterprises) indicates that foreign ownership, firm size, human capital, technological capabilities and geographical location are all positively associated with export shares. Furthermore, higher levels of technological capability are associated with larger firm size, university-level manpower and formal research and development. Improving the country's investment climate, facilitating the development of business services markets and upgrading SMEs as subcontractors to foreign firms are important policy lessons for developing economies
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Paper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number
032.
Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
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