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Domestic Competition Spurs Exports; The Indian Example

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  • Tushar Poddar

Abstract

India's exports nearly tripled in the 1990s. Decomposing export growth shows that it has been driven by incumbent firms rather than the entry of new firms. By using a new panel on Indian firms and estimating a dynamic discrete-choice model of the firm's decision to export, we find evidence that economic liberalization has led to greater domestic competition, spurring firm efficiency and increasing Indian firms' competitiveness and ability to export. We show that export growth has been an outcome of local firm innovation which has come about due to increased competitive pressure from FDI entry.

Suggested Citation

  • Tushar Poddar, 2004. "Domestic Competition Spurs Exports; The Indian Example," IMF Working Papers 04/173, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:04/173
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    Cited by:

    1. Bank for International Settlements, 2006. "Monetary policy in Asia: approaches and implementation," BIS Papers, Bank for International Settlements, number 31, December.
    2. Franco, Chiara & Sasidharan, Subash, 2010. "MNEs, technological efforts and channels of export spillover: An analysis of Indian manufacturing industries," Economic Systems, Elsevier, vol. 34(3), pages 270-288, September.
    3. Chiara Franco & Subash Sasidharan, 2009. "MNEs and Export Spillovers: An Analysis of Indian Manufacturing Industries," Working Papers 2009-049, Madras School of Economics,Chennai,India.
    4. Pradeep Kumar Keshari, 2016. "Spillovers from FDI and Decision to Export by the Domestic Firms: The case of select Indian industries," Working Papers id:11382, eSocialSciences.
    5. Kaushik Bhattacharya, 2006. "Monetary policy approaches in India," BIS Papers chapters,in: Bank for International Settlements (ed.), Monetary policy in Asia: approaches and implementation, volume 31, pages 74-102 Bank for International Settlements.
    6. Baboo M. Nowbutsing & Sonalisingh Ramsohok, 2012. "The rise of China: a new fear of trade competition for Mauritius?," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 5(2), pages 91-106, June.

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    Keywords

    Competition; Exports; India; FDI; export growth; export intensity; exporters; export behavior; competitive pressure; Firm Behavior; Country and Industry Studies of Trade;

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