Determinants of Firm-level Export Performance: A Case Study of Indian Textile Garments and Apparel Industry
Drawing on international trade and industrial organisation theories, this paper identifies variable affecting (a) export decision function i.e. to export or sell in domestic market, and (b) export performance function i.e. share of exports in output. These functions are estimated for Garment and Apparel producing units in Delhi. Form of business organisation reflecting access to capital turns out to be a key determinant in both functions. Estimated marginal impact of identified variables (scale and share of sales expenses) on the probability of exporting in estimated Probit model declines sharply in making from single proprietorship to partnership and further to limited companies. On the other hand, every single determinant (scale, share of wages, share of sales expenses and technical efficiency) has found to have increasing marginal impact on export performance in estimated Tobit model in moving across the three forms of business organisation. Empirical results suggest two policy changes to boost export performance. One, given the importance of scale for exports, the existing policy of reserving garments and apparel for exclusive production in small scale units needs to be scrapped. Simultaneously, it is also necessary to amend current labour legislation applicable to large scale factory units as it introduces labour market inflexibility and hence serves as an impediment to expansion of existing units and entry of new units.
|Date of creation:||May 2000|
|Date of revision:|
|Contact details of provider:|| Postal: Delhi 110 007|
Phone: (011) 27667005
Fax: (011) 27667159
Web page: http://www.cdedse.org/
More information through EDIRC
|Order Information:|| Web: http://www.cdedse.org/ Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Suresh D. Tendulkar & T. A. Bhavani, 1997. "Policy on Modern Small Scale Industries: A Case of Government Failure," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 32(1), pages 39-64, January.
- Kravis, Irving B, 1970. "Trade as a Handmaiden of Growth: Similarities between the Nineteenth and Twentieth Centuries," Economic Journal, Royal Economic Society, vol. 80(323), pages 850-72, December.
- Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62 Elsevier.
- Egan, Mary Lou & Mody, Ashoka, 1992. "Buyer-seller links in export development," World Development, Elsevier, vol. 20(3), pages 321-334, March.
- Helpman, Elhanan, 1984. "Increasing returns, imperfect markets, and trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 7, pages 325-365 Elsevier.
- Fuss, Melvyn & McFadden, Daniel & Mundlak, Yair, 1978. "A Survey of Functional Forms in the Economic Analysis of Production," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 4 McMaster University Archive for the History of Economic Thought.
- Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-93, September.
- Carr, Jack L & Mathewson, G Frank, 1988. "Unlimited Liability as a Barrier to Entry," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 766-84, August.
- Suresh D. Tendulkar & T. A. Bhavani, 1997. "Policy On Modem Small Scale Industries: A Case Of Government Failure," Working papers 44, Centre for Development Economics, Delhi School of Economics.
- Bhagwati, Jagdish N, 1988. "Export-Promoting Trade Strategy: Issues and Evidence," World Bank Research Observer, World Bank Group, vol. 3(1), pages 27-57, January.
- Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
- Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181, December.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
When requesting a correction, please mention this item's handle: RePEc:cde:cdewps:81. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sanjeev Sharma)
If references are entirely missing, you can add them using this form.