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Multinational Firms and the Evolution of the Indian Software Industry

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Author Info
Suma S. Athreye (Economics, Open University, United Kingdom)

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Abstract

The Indian software industry appears to provide a startling confirmation of the benefits of multinational investment in a fledging industrial sector. The main question explored in this paper is how and why this happened. We find that multinational firms had an important catalyzing effect on the industry's evolution, even though foreign firms established by expatriate Indians probably exerted more competitive pressure. We do not accept a popular view, which ascribes this benign influence to the development of human capital. We argue is was tight labour markets due to foreign competition, which induced domestic firms to both acquire unique organizational capabilities and to improve the value-adding strategies of multinational firms.

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Publisher Info
Paper provided by East-West Center, Economics Study Area in its series Economics Study Area Working Papers with number 51.

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Length: 39 pages
Date of creation: Jan 2003
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Handle: RePEc:ewc:wpaper:wp51

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Suma S. Athreye, 2005. "The Indian software industry and its evolving service capability," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 393-418, June.
  2. Arora, Ashish & Athreye, Suma, 2002. "The software industry and India's economic development," Information Economics and Policy, Elsevier, vol. 14(2), pages 253-273, June. [Downloadable!] (restricted)
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  3. Arora, Ashish & Arunachalam, V. S. & Asundi, Jai & Fernandes, Ronald, 2001. "The Indian software services industry," Research Policy, Elsevier, vol. 30(8), pages 1267-1287, October. [Downloadable!] (restricted)
  4. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-74, February.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dieter Ernst, 2004. "Searching for a New Role in East Asian Regionlization: Japanese Production Networks in the Electronics Industry," Economics Study Area Working Papers 68, East-West Center, Economics Study Area. [Downloadable!]
  2. Boy Luethje, 2004. "Global Production Networks and Industrial Upgrading in China: The Case in Electronics Contract Manufacturing," Economics Study Area Working Papers 74, East-West Center, Economics Study Area. [Downloadable!]
  3. Devashish Mitra & Priya Ranjan, 2005. "Y2K and Offshoring: The Role of External Economies and Firm Heterogeneity," NBER Working Papers 11718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Marco Giarratana & Alessandro Pagano & Salvatore Torrisi, 2003. "Links Between Multinational Firms and Domestic Firms: a Comparison of the Software Industry in India, Ireland and Israel," LEM Papers Series 2003/22, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
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This page was last updated on 2009-11-7.

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