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Technology Sourcing and Outward FDI: Comparison of Chemicals and Information Technology Industries in India


  • Savita Bhat

    () (Madras School of Economics, Chennai, India)

  • K. Narayanan

    () (Department of Humanities and Social Sciences, Indian Institute of Technology Bombay, Mumbai, India)


The objective of the paper is to analyze the determinants of outward FDI by firms in a developing country like India. In particular, the study investigates the role of technology sourcing in determining outward FDI, in the presence of other firm specific factors. Further, it undertakes a comparative analysis of the factors influencing outward FDI of firms for two important industries in India, namely, chemicals and information technology (IT). The analysis confirms that technology sourcing, in particular, in-house R&D is important for the decision of the firm to choose outward FDI. In the chemical industry even import of capital goods, designs, drawings and blueprints seem to be positively influencing outward investments. Size of the firm, global network linkages, skill and type of product also emerge to be important factors in determining outward FDI in both the industries.

Suggested Citation

  • Savita Bhat & K. Narayanan, 2011. "Technology Sourcing and Outward FDI: Comparison of Chemicals and Information Technology Industries in India," Transnational Corporations Review, Ottawa United Learning Academy, vol. 3(2), pages 50-64, June.
  • Handle: RePEc:oul:tncr09:v:3:y:2011:i:2:p:50-64

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    Cited by:

    1. Nunnenkamp, Peter & Sosa Andrés, Maximiliano & Vadlamannati, Krishna Chaitanya & Waldkirch, Andreas, 2012. "What drives India's outward FDI?," Kiel Working Papers 1800, Kiel Institute for the World Economy (IfW).
    2. Peter Nunnenkamp & Maximiliano Sosa Andrés, 2014. "Ownership Choices of Indian Direct Investors: Do FDI Determinants Differ between Joint Ventures and Wholly Owned Subsidiaries?," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(1), pages 39-78, June.


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