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Determinants of Exports of Information Technology in India

Author

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  • Sangita Dutta Gupta
  • Ajitava Raychaudhuri
  • Sushil Kumar Haldar

Abstract

The information technology (IT) sector has contributed significantly to the economic growth in India and is one of the fastest-growing export-oriented sectors in India. The objective of this article is to explore the determinants of exports of IT companies of India from 2000 to 2012 using company-level data. Applying ordinary panel data regression, the article finds that world demand and real effective exchange rate have expected signs on company exports. Surprisingly, foreign capital, which played a crucial role in IT sector development in India, has a negative coefficient, highlighting substitution relation between export and domestic demands. The dynamic panel data regression exhibits persistence of exports which acts as a moderating factor on demand fluctuations and its high impact. Further, the dynamic panel estimations clearly show the predominant influence of past exports on gross domestic product (GDP) growth in India, which makes world demand, standardized as relative to India’s GDP, inconsequential for its future exports.

Suggested Citation

  • Sangita Dutta Gupta & Ajitava Raychaudhuri & Sushil Kumar Haldar, 2015. "Determinants of Exports of Information Technology in India," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(1), pages 64-81, March.
    • Handle: RePEc:sae:soueco:v:16:y:2015:i:1:p:64-81
    DOI: 10.1177/1391561415575128
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mini P. Thomas, 2016. "Estimation of Income and Price Elasticities of India’s Trade in Services," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 27-45, March.
    2. Muhammad Shahid Hassan & Amna Kausar & Noman Arshed, 2022. "Investigating Export Determinants: A Time Series Evidence From Canada," SAGE Open, , vol. 12(2), pages 21582440221, June.
    3. Gupta, Shagufta & Ghosh, Poulomi & Sridhar, V., 2022. "Impact of data trade restrictions on IT services export: A cross-country analysis," Telecommunications Policy, Elsevier, vol. 46(9).
    4. Mubasher Iqbal & Rukshana Kalim & Noman Arshed, 2019. "Domestic and Foreign Incomes and Trade Balance - A Case of South Asian Economies," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(4), pages 355-368, December.
    5. Pami Dua & Ritu Suri, 2023. "India’s Bilateral Export Growth and Exchange Rate Volatility: A Panel GMM Approach," Springer Books, in: Pami Dua (ed.), Macroeconometric Methods, chapter 0, pages 123-148, Springer.
    6. Aneesha Chitgupi, 2019. "Macroeconomic determinants of software services exports and impact on external stabilisation for India: An empirical analysis," Working Papers 432, Institute for Social and Economic Change, Bangalore.

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    More about this item

    Keywords

    Information technology; software export; FDI; research and development; ordinary panel regression; dynamic panel regression;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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