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Exports, Outward FDI and Technology Upgrading: Firm Level Evidence from India

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  • Sandra Lancheros

Abstract

This paper evaluates the individual and combined effects of exporting and outward foreign direct investments (OFDI) on firms’ technology investments at home using firm-level data from the pharmaceutical industry in India. The analysis accounts for unobserved firm heterogeneity and the endogeneity of the choice of foreign market participation, and shows that exporting has been an important channel through which Indian multinational expansion has encouraged greater domestic technological activity. However, all else constant, higher levels of OFDI have rather acted as substitutes for such technological efforts.

Suggested Citation

  • Sandra Lancheros, 2016. "Exports, Outward FDI and Technology Upgrading: Firm Level Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 52(10), pages 1415-1430, October.
    • Handle: RePEc:taf:jdevst:v:52:y:2016:i:10:p:1415-1430
    DOI: 10.1080/00220388.2016.1139697
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    References listed on IDEAS

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    1. Alla Lileeva & Daniel Trefler, 2010. "Improved Access to Foreign Markets Raises Plant-level Productivity…For Some Plants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1051-1099.
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    5. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
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    Cited by:

    1. Hiroshi Mukunoki, 2017. "Market access and technology adoption in the presence of FDI," Journal of Economics, Springer, vol. 122(3), pages 199-238, November.
    2. Amal Krishnan & Padmaja Mundakkad, 2023. "Outward FDI and its impact on the parent firm: A case of Indian manufacturing firms," Economics Bulletin, AccessEcon, vol. 43(3), pages 1470-1484.
    3. Jiang, Mingrui & Luo, Sumei & Zhou, Guangyou, 2020. "Financial development, OFDI spillovers and upgrading of industrial structure," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    4. Keshab Bhattarai & Vipin Negi, 2020. "FDI and Economic Performance of Firms in India," Studies in Microeconomics, , vol. 8(1), pages 44-74, June.
    5. Reddy, Ketan & Sasidharan, Subash & Doytch, Nadia, 2022. "Outward foreign direct investment and domestic innovation efforts: Evidence from India," Journal of Economics and Business, Elsevier, vol. 122(C).
    6. Meyer, Birgit, 2020. "How deep is your love? Innovation, Upgrading and the Depth of Internationalization," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224584, Verein für Socialpolitik / German Economic Association.
    7. Ramya T. Venkateswaran, 2023. "Is there an illusion of symmetry in cultural distance from Asia–pacific Emnes? the role of business groups in navigating cultural distance through ambidextrous learning," Asia Pacific Journal of Management, Springer, vol. 40(3), pages 1169-1215, September.
    8. Wang, Delu & Wang, Yadong & Jiang, Wuding & Shi, Xunpeng, 2023. "Has outward foreign direct investment alleviated industrial overcapacity in China? An empirical test of the upstream and downstream industrial links," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 250-263.

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