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

Listed author(s):
  • Ratbek Dzhumashev
  • Vinod Mishra
  • Russell Smyth

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.

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File URL: http://www.buseco.monash.edu.au/eco/research/papers/2013/index.html
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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 60-13.

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Length: 41 pages
Date of creation: Jul 2013
Handle: RePEc:mos:moswps:2013-60
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Department of Economics, Monash University, Victoria 3800, Australia

Phone: +61-3-9905-2493
Fax: +61-3-9905-5476
Web page: http://business.monash.edu/economics
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