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International Trade, R&D Spillovers and Productivity: Evidence from Indian Manufacturing Industry

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  • Mavannoor Parameswaran

Abstract

This paper examines the effect of trade facilitated R&D spillovers on the productivity of manufacturing firms in India, inter-sectoral variation in the effect on productivity and the importance of firms' investment in R&D, technology imports and plant and machinery in enhancing the productivity effect. Using firm level panel data, the study shows that R&D spillovers have a significant effect on productivity and that this effect is greater in technology-intensive industries. The paper also shows that firms' investment in plant and machinery enhances the productivity effect of R&D spillovers. The paper provides detailed micro-level evidence on the argument that trade openness promotes technological progress in developing countries.

Suggested Citation

  • Mavannoor Parameswaran, 2009. "International Trade, R&D Spillovers and Productivity: Evidence from Indian Manufacturing Industry," Journal of Development Studies, Taylor & Francis Journals, vol. 45(8), pages 1249-1266.
    • Handle: RePEc:taf:jdevst:v:45:y:2009:i:8:p:1249-1266
    DOI: 10.1080/00220380902862911
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