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Foreign Shareholding and Productivity Spillover: A Firm-Level Analysis of Indian Manufacturing

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  • Pritish Kumar Sahu
  • Sakiru Adebola Solarin

Abstract

The study largely attempts to examine the spillover from Foreign Direct Investment (FDI) in Indian manufacturing by using the firm-level data for the period 2000-2009. With the use of Cobb-Douglas-type production function, it is observed that for the entire manufacturing sector, the impact of FDI on output growth is positive and significant. The result indicates that the increase in foreign equity at firm level and at sector level directly affects the productivity growth of the firm. However this does not hold true when analyzed at sector level. The paper also attempts to find the possible reason for positive spillover by analyzing some more factors of the present dataset.

Suggested Citation

  • Pritish Kumar Sahu & Sakiru Adebola Solarin, 2013. "Foreign Shareholding and Productivity Spillover: A Firm-Level Analysis of Indian Manufacturing," The IUP Journal of Applied Economics, IUP Publications, vol. 0(2), pages 7-24, April.
  • Handle: RePEc:icf:icfjae:v:12:y:2013:i:2:p:7-24
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