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Internationalization of Indian enterprises: patterns, determinants and policy issues

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  • Prema-chandra Athukorala
  • C. Veeramani

Abstract

This paper examines the emerging patterns and economic implications of Indian overseas direct investment (ODI) from a historical perspective. The novelty of the analysis lies in its specific focus on the implications of the liberalization reforms initiated in the early 1990s and the resultant changes in the overall investment climate for the internationalisation of domestic companies. The findings cast doubts on the popular perception that the recent surge in ODI from India is an unmixed economic blessing, a sign of 'coming of age' of the Indian companies in global business. Given the remaining distortion in the domestic investment climate, the net national gains from these investments could be much less than what the reported absolute numbers suggest.

Suggested Citation

  • Prema-chandra Athukorala & C. Veeramani, 2016. "Internationalization of Indian enterprises: patterns, determinants and policy issues," Departmental Working Papers 2016-04, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2016-04
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2016-05/2016-04_athukorala_verramani_internationalization_wp.pdf
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    References listed on IDEAS

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    1. Louis T. Wells, 1983. "Third World Multinationals: The Rise of Foreign Investments from Developing Countries," MIT Press Books, The MIT Press, edition 1, volume 1, number 026273169x, September.
    2. Philippe Aghion & Robin Burgess & Stephen J. Redding & Fabrizio Zilibotti, 2008. "The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India," American Economic Review, American Economic Association, vol. 98(4), pages 1397-1412, September.
    3. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
    4. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    5. Deepak Nayyar, 2008. "The Internationalization of Firms From India: Investment, Mergers and Acquisitions," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 111-131.
    6. Lecraw, Donald J, 1977. "Direct Investment by Firms from Less Developed Countries," Oxford Economic Papers, Oxford University Press, vol. 29(3), pages 442-457, November.
    7. Kudaisya, Medha, 2003. "The Life and Times of G.D.Birla," OUP Catalogue, Oxford University Press, number 9780195645729.
    8. Rana Hasan & Devashish Mitra & K.V. Ramaswamy, 2007. "Trade Reforms, Labor Regulations, and Labor-Demand Elasticities: Empirical Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 466-481, August.
    9. Aditya Bhattacharjea, 2006. "Labour Market Regulation and Industrial Performance in India--A Critical Review of the Empirical Evidence," Working papers 141, Centre for Development Economics, Delhi School of Economics.
    10. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
    11. Encarnation, Dennis J., 1982. "The political economy of Indian joint industrial ventures abroad," International Organization, Cambridge University Press, vol. 36(1), pages 31-59, January.
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    Cited by:

    1. Prema-chandra Athukorala & C. Veeramani, 2019. "From Import Substitution to Integration into Global Production Networks: The Case of the Indian Automobile Industry," Asian Development Review, MIT Press, vol. 36(2), pages 72-99, September.
    2. I. Shovkun, 2019. "Investment climate as a factor of industrial development in Ukraine," Economy and Forecasting, Valeriy Heyets, issue 4, pages 70-103.
    3. Tamas Gerocs, 2017. "Internationalization of Indian multinational enterprises - motivations, strategies and regulation from the experience of Indian investments - a focus on Europe," IWE Working Papers 234, Institute for World Economics - Centre for Economic and Regional Studies- Hungarian Academy of Sciences.

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    More about this item

    Keywords

    India; overseas direct investment; foreign direct investment; multinational enterprise;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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