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Impacting Instruments for Export Competitiveness: Evidence from India and China in the Global Manufacturing Market

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  • Sayed Gulzar Ganai
  • Abdul Hamid Mir
  • Showkat Ahmad Bhat
  • Javid Ahmad Khan

Abstract

This study attempts to find the impacting instruments of export competitiveness for India and China by utilizing the revealed comparative advantage index and panel data regression during 2001–2020. The top 10 product groups at HS two-digit level were selected for analysis in the sample economies. The results revealed that random effect analysis remained more significant than the fixed effect for these economies. The random effect analysis showed that the top positively impacting variables with a high magnitude for Chinese export competitiveness are foreign direct investment (FDI) and research and development (R&D), followed by relative export prices (REP). The wage rate is the only factor that remained negative in magnitude for China. On the other hand, India tried to absorb FDI toward making the domestic market strong along with R&D, which has significantly impacted its growing competitiveness in the global market. REP negatively impacted Indian competitiveness with a high magnitude, followed by the real effective exchange rate. China has remained entirely integrated with the international market through joint ventures and multi-national companies and has promoted its exports in an improved form in the global market as compared to India. Moreover, China remained quite active in promoting the competitiveness of its manufactured product lines through investing in R&D and gross fixed capital formation, which contributed a significant part to its export competitiveness. In contrast, such investments remained relatively unresponsive for India. JEL Classification C33, F14, F15, F19

Suggested Citation

  • Sayed Gulzar Ganai & Abdul Hamid Mir & Showkat Ahmad Bhat & Javid Ahmad Khan, 2024. "Impacting Instruments for Export Competitiveness: Evidence from India and China in the Global Manufacturing Market," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(1), pages 130-142, January.
    • Handle: RePEc:sae:emeeco:v:16:y:2024:i:1:p:130-142
    DOI: 10.1177/09749101221146423
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    References listed on IDEAS

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    More about this item

    Keywords

    Export competitiveness; RCA; India; China; manufacturing; FDI;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F19 - International Economics - - Trade - - - Other

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