IDEAS home Printed from https://ideas.repec.org/p/eab/laborw/22511.html
   My bibliography  Save this paper

Export Competitiveness in the Indian auto-component industry : Does Low Wage Cost matter?

Author

Listed:
  • Madhuri Saripalle

    (MSE)

Abstract

This paper analyzes the differences in the export behavior of domestic and multinational firms in the Indian auto component industry. Three types of firms are identified according to ownership : purely domestic and licensees, domestic joint ventures and joint ventures with majority stakes by the multinationals. Although all the types of firms face the same labor costs, any difference in export performances could arise because of higher productivity of labor. The paper tests whether this is true for the domestic firms and the multinational firms in the Industry. It finds that only in the case of the multinational firms, it is not just cheap labor in terms of low wage rate per worker, but low wage in relation to productivity of that labor which leads to comparative cost advantage in exports. The domestic firms are competing based on low wage cost more than the productivity of the labor. Among other factors discussed, of the reasons is the low value added nature of the components that are being exported. The role of other factors like, size, import- intensity and distribution expenses is also examined, followed by an analysis of the scope for domestic firms to become a part of the global supply chain.

Suggested Citation

  • Madhuri Saripalle, 2007. "Export Competitiveness in the Indian auto-component industry : Does Low Wage Cost matter?," Labor Economics Working Papers 22511, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:laborw:22511
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/22511
    Download Restriction: no

    More about this item

    Keywords

    Export intensity; labor costs; productivity; competitiveness; import intensity; auto component industry; India;

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:laborw:22511. 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: (Shiro Armstrong). General contact details of provider: http://edirc.repec.org/data/eaberau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.