Indian economic reform since early 1990s aims at improving productivity and competitiveness of major industries. The paper examines spillovers from foreign direct investment (FDI), research and development (R&D) and exporting activities on productivity both for foreign and domestic manufacturing firms. The data is obtained from the PROWESS database provided by the Centre for Monitoring Indian Economy (CMIE). Balanced panel of over 1,000 manufacturing firms in India between 1994 and 2006 are considered for our empirical analysis. Findings indicate that foreign presence has a significant spillover effect on the productivity of the Indian manufacturing firms compared to the alternative spillovers such as from R&D and export initiatives.
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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number
30/08.
Find related papers by JEL classification: F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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