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Graduating to globalisation: A study of southern multinationals

  • Demirbas, Dilek


    (Newcastle Business School)

  • Patnaik, Ila


    (National Institute of Public Finance and Policy)

  • Shah, Ajay


    (National Institute of Public Finance and Policy)

FDI by firms in developing countries is a recent phenomenon and demands a study of relationship between firm productivity and different modes of globalisation activities. This paper attempts to understand this relationship through ordered probit models, examining two key hypotheses using firm level panel data from India. First, we test whether there are characteristic differences between domestic firms, exporting firms and firms engaging with FDI. Second, we test if FDI is an integral part of the evolution of firms in developing countries. Our results suggest that there are strong differences between domestic firms, exporting firms, and firms that invest abroad, especially in their knowledge investment, indicating the presence of a ladder of quality in graduating to globalisation.

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Paper provided by National Institute of Public Finance and Policy in its series Working Papers with number 10/65.

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Length: 20
Date of creation: Feb 2010
Date of revision:
Handle: RePEc:npf:wpaper:10/65
Note: Working Paper 65, 2010
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  25. Blalock, Garrick & Gertler, Paul J., 2004. "Learning from exporting revisited in a less developed setting," Journal of Development Economics, Elsevier, vol. 75(2), pages 397-416, December.
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  27. Jaya Prakash Pradhan, 2004. "The determinants of outward foreign direct investment: a firm-level analysis of Indian manufacturing," Oxford Development Studies, Taylor & Francis Journals, vol. 32(4), pages 619-639.
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