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Devevloping Linkages Between Export Guarantees And Technical Efficiency Of Indian Firms

Author

Listed:
  • Kashika Arora

    (Indian Institute of Foreign Trade (IIFT))

  • Areej A. Siddiqui

    (Indian Institute of Foreign Trade (IIFT))

  • Biswajit Nag

    (Indian Institute of Foreign Trade (IIFT))

Abstract

The study examines the technical efficiency of Indian small manufacturing firms and their specific determinants utilising firm-level data for 2007-08 and 2017-18. The focus is on simultaneous expenditure on insurance premium and export earnings by firms on their technical efficiency. Results from a stochastic frontier production function and technical inefficiency effects model reveal that Indian firms on an average had widening technical efficiencies for the years. The results also indicate that factors such as firm size, firm age, type of firm ownership, technological imports, expenditure on R&D and export guarantees contribute to the technical efficiency. In fact, top 25 percent of firms in 2017-18 relied more on exports with higher expenditure on marketing & advertising and expenditure on export guarantees. This, thus warrants further improvement in technical efficiency through easier access to financial services, access to skilled labour, training of the workforce and entrepreneurs, encouraging foreign investment for operational synergies and export incentives for easier and risk-free penetration in the world market.

Suggested Citation

  • Kashika Arora & Areej A. Siddiqui & Biswajit Nag, 2020. "Devevloping Linkages Between Export Guarantees And Technical Efficiency Of Indian Firms," Working Papers 2045, Indian Institute of Foreign Trade.
    • Handle: RePEc:ift:wpaper:2045
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    References listed on IDEAS

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    2. Nivedita Mullick & Areej A. Siddiqui, 2021. "Economic Integration Agreements and Extensive Margin of Export: An Empirical Study of India," Working Papers 2155, Indian Institute of Foreign Trade.

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    More about this item

    Keywords

    Technical Efficiency; Insurance Policy; Export Credit Guarantee Scheme; Trade; Manufacturing Firms;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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