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Domestic Competition Spurs Exports: The Indian Example

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  • Mr. Tushar Poddar

Abstract

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.

Suggested Citation

  • Mr. Tushar Poddar, 2004. "Domestic Competition Spurs Exports: The Indian Example," IMF Working Papers 2004/173, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2004/173
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    Cited by:

    1. Eric E. O. Opoku & Isabel K. M. Yan & Kate Hynes, 2020. "Reaching up and reaching out: The impact of competition on firms’ productivity and export decisions," Pacific Economic Review, Wiley Blackwell, vol. 25(1), pages 69-101, February.
    2. Bank for International Settlements, 2006. "Monetary policy in Asia: approaches and implementation," BIS Papers, Bank for International Settlements, number 31.
    3. Chiara Franco & Subash Sasidharan, 2009. "MNEs and Export Spillovers: An Analysis of Indian Manufacturing Industries," Working Papers 2009-049, Madras School of Economics,Chennai,India.
    4. Pradeep Kumar Keshari, 2016. "Spillovers from FDI and Decision to Export by the Domestic Firms: The case of select Indian industries," Working Papers id:11382, eSocialSciences.
    5. Senol Babuşçu & Adalet Hazar & M. Nihat Solakoglu & Cengiz Tunc, 2019. "Sector-Level Competition and Export: Evidence from Exporter Dynamics Database," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 1-18, October.
    6. Chiara Franco & Subash Sasidharan, 2009. "Fdi, Export Spillover And Firm Heterogeneity - An Application To The Indian Manufacturing Case," Development Research Unit Working Paper Series 06-09, Monash University, Department of Economics.
    7. Franco, Chiara & Sasidharan, Subash, 2010. "MNEs, technological efforts and channels of export spillover: An analysis of Indian manufacturing industries," Economic Systems, Elsevier, vol. 34(3), pages 270-288, September.
    8. Giorgio Barba Navaretti & Matteo Bugamelli & Riccardo Cristadoro & Daniela Maggioni, 2012. "Are firms exporting to China and India different from other exporters?," Questioni di Economia e Finanza (Occasional Papers) 112, Bank of Italy, Economic Research and International Relations Area.
    9. Kaushik Bhattacharya, 2006. "Monetary policy approaches in India," BIS Papers chapters, in: Bank for International Settlements (ed.), Monetary policy in Asia: approaches and implementation, volume 31, pages 74-102, Bank for International Settlements.

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