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Exporting, R&D Investment and Firm Survival in the Indian IT Sector

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  • Ratbek Dzhumashev
  • Vinod Mishra
  • Russell Smyth

Abstract

This paper examines the effect of exporting and R&D investment on firm survival for a panel of Indian IT firms. We show that exporting has competing effects on firm survival. On the one hand, exporting and investing in productivity are complementary activities, while, on the other, exporting activity is an additional source of uncertainty for the firm. We show that both effects influence survival, but operate at different points in time. Specifically, the hazard facing exporters is higher than non-exporters in the initial phase following entry into the export market, reflecting the fact that exporters are particularly vulnerable to shocks in the start-up phase. However, over time, exporters benefit more from productivity gains than non-exporters and the hazard facing exporters falls below that confronting non-exporters.

Suggested Citation

  • Ratbek Dzhumashev & Vinod Mishra & Russell Smyth, 2013. "Exporting, R&D Investment and Firm Survival in the Indian IT Sector," Monash Economics Working Papers 60-13, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2013-60
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    6. Quang Hoan Truong & Van Chung Dong, 2021. "Spillover Effects of Foreign and Domestic Exporting Firms on Export Decisions of Local Manufacturing Firms: Evidence from Viet Nam," Working Papers DP-2021-43, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Jafari Sadeghi, Vahid & Biancone, Paolo Pietro, 2018. "How micro, small and medium-sized enterprises are driven outward the superior international trade performance? A multidimensional study on Italian food sector," Research in International Business and Finance, Elsevier, vol. 45(C), pages 597-606.
    8. Rath, Badri Narayan, 2018. "Productivity growth and efficiency change: Comparing manufacturing- and service-based firms in India," Economic Modelling, Elsevier, vol. 70(C), pages 447-457.
    9. Subash Sasidharan & Ketan Reddy, 2021. "Innovation, Product Sophistication and Export Market Survival: A Study of Indian Manufacturing," Working Papers DP-2021-45, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    India; Firm survival; Information Technology; R&D; Exports;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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