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International trade, R & D spillovers and productivity: Evidence from Indian manufacturing industry

  • M. Parameswaran

    ()

    (Centre for Development Studies
    Institute of Economic Growth)

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    This paper examines the effect of trade facilitated R & D spillovers on the productivity of manufacturing firms in India. Though developing countries are considered as the major beneficiaries of trade facilitated R&D spillovers, detailed empirical investigations in their context are lacking. The paper distinguishes R&D spillovers into two types and examines their effect on productivity. It also considers the intersectoral variation in productivity effect and the importance of firms' investment in R&D, imported technology and plant and machinery in enhancing the effect on productivity. The paper uses firm level panel data and an improved estimation method. It shows that R&D spillovers have a significant effect on productivity and there exists intersectoral variation with greater contribution to productivity in technology intensive industries. The paper also shows that firms' investment in R&D and plant and machinery are enhancing the productivity effect of R&D spillovers.

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    File URL: http://www.cds.edu/wp-content/uploads/2012/09/wp385.pdf
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    Paper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 385.

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    Length: 55 pages
    Date of creation: Jun 2007
    Date of revision:
    Handle: RePEc:ind:cdswpp:385
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    1. Nicita, Alessandro & Olarreaga, Marcelo, 2001. "Trade and production, 1976-99," Policy Research Working Paper Series 2701, The World Bank.
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    5. Sunil Mani, 2005. "Keeping pace with globalisation innovation capability in Korea's telecommunications equipment industry," Centre for Development Studies, Trivendrum Working Papers 370, Centre for Development Studies, Trivendrum, India.
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    7. Connolly, Michelle, 2003. "The dual nature of trade: measuring its impact on imitation and growth," Journal of Development Economics, Elsevier, vol. 72(1), pages 31-55, October.
    8. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
    9. Lee, Jong-Wha, 1995. "Capital goods imports and long-run growth," Journal of Development Economics, Elsevier, vol. 48(1), pages 91-110, October.
    10. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45 National Bureau of Economic Research, Inc.
    11. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
    12. Paul M. Romer, 1993. "New Goods, Old Theory, and the Welfare Costs of Trade Restrictions," NBER Working Papers 4452, National Bureau of Economic Research, Inc.
    13. L. K. Raut, 1988. "R & D Behaviour of Indian Firms: A Stochastic Control Model," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 23(2), pages 207-229, July.
    14. H. Schmitz & P. Knorringa, 2000. "Learning from Global Buyers," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 177-205.
    15. Ferrantino, Michael J, 1992. "Technology Expenditures, Factor Intensity, and Efficiency in Indian Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 689-700, November.
    16. Dibyendu S. Maiti, 2006. "Organisational Morphology of Rural Industries in Liberalised India: A Study of West Bengal," Working Papers id:746, eSocialSciences.
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