IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v48y2025i7p1616-1629.html
   My bibliography  Save this article

Spillover Effects of Foreign Direct Investment on Firms' Exports: Evidence From India

Author

Listed:
  • Sanjay Kumar Mangla
  • Chih‐Hai Yang

Abstract

Owing to economic globalisation, foreign direct investment (FDI) inflows and exports have increased considerably in India. Using a firm‐level panel data ranging from 2012 to 2022, this study examines the spillover effect of FDI on Indian firms' export propensity. The empirical results reveal that within‐industry FDI generates a substantial export spillover effect that facilitates local firms to undertake exporting, but inter‐industry FDI does not have such an effect. Specifically, absorptive capability helps learn exporting knowledge and plays a key role in mediating the spillover effect. Further analyses find that the demonstration effect of FDI applies to manufacturing rather than service sectors. The net spillover effects, measured by the market share and research & development activities of foreign firms, also vary between manufacturing and service sectors in India.

Suggested Citation

  • Sanjay Kumar Mangla & Chih‐Hai Yang, 2025. "Spillover Effects of Foreign Direct Investment on Firms' Exports: Evidence From India," The World Economy, Wiley Blackwell, vol. 48(7), pages 1616-1629, July.
  • Handle: RePEc:bla:worlde:v:48:y:2025:i:7:p:1616-1629
    DOI: 10.1111/twec.13719
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/twec.13719
    Download Restriction: no

    File URL: https://libkey.io/10.1111/twec.13719?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:48:y:2025:i:7:p:1616-1629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.