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Outward FDI and Knowledge Flows: A Study of the Indian Automotive Sector

  • Jaya Prakash Pradhan


    (Sardar Patel Institute of Economic and Social Research)

  • Neelam Singh

    (Lady Shri Ram College, Delhi University)

In recent years developing countries have emerged as significant participants in the OFDI (outward foreign direct investment), seeking strategic assets. Such asset exploiting-cum-augmenting OFDI involves potential two-way cross-border knowledge flows. This study examines several dimensions of OFDI in the Indian automotive industry – currently internationalizing rapidly in terms of OFDI. This study undertakes a quantitative analysis of the influence of OFDI activities on the in-house (domestic) R&D performance of the Indian automotive firms during 1988-2008, and finds expected favourable impact on the R&D intensity. The study concludes with suggestions to promote OFDI, particularly the strategic asset enhancing OFDI.(Please Puchase For Further Reading)

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Article provided by Faculty of Economics and Administration, University of Malaya in its journal International Journal of Institutions and Economies.

Volume (Year): 1 (2009)
Issue (Month): 1 (June)
Pages: 156-187

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Handle: RePEc:umk:journl:v:1:y:2009:i:1:p:156-187
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  15. Dunning,John H. & Hoesel,Roger,van & Narula,Rajneesh, 1996. "Explaining the 'new' wave of outward FDI from developing coountries : the case of Taiwan and Korea," Research Memorandum 009, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  16. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
  17. Kumar, Nagesh & Aggarwal, Aradhna, 2005. "Liberalization, outward orientation and in-house R&D activity of multinational and local firms: A quantitative exploration for Indian manufacturing," Research Policy, Elsevier, vol. 34(4), pages 441-460, May.
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