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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)


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.

Suggested Citation

  • M. Parameswaran, 2007. "International trade, R & D spillovers and productivity: Evidence from Indian manufacturing industry," Centre for Development Studies, Trivendrum Working Papers 385, Centre for Development Studies, Trivendrum, India.
  • Handle: RePEc:ind:cdswpp:385

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    References listed on IDEAS

    1. Keller, Wolfgang, 2000. "Do Trade Patterns and Technology Flows Affect Productivity Growth?," World Bank Economic Review, World Bank Group, vol. 14(1), pages 17-47, January.
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    6. 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.
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    13. 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.
    14. 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.
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    More about this item


    R&D Spillover; trade; manufacturing industry; productivity;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes


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