IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

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

Listed author(s):
  • Madhuri Saripalle


Registered author(s):

    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.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by East Asian Bureau of Economic Research in its series Labor Economics Working Papers with number 22511.

    in new window

    Date of creation: Jan 2007
    Handle: RePEc:eab:laborw:22511
    Contact details of provider: Postal:
    JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200

    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    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)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.