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National Innovation System and the Emergence of Indian Information and Software Technology Multinationals

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  • Pradhan, Jaya Prakash

Abstract

The dramatic growth of outward FDI from India over the past decade is significantly led by Indian information and software technology (IST) firms. These IST firms have aggressively adopted outward FDI as a competitive strategy for seeking overseas markets, networks, skills and technologies. This study analyzes the factors leading to the emergence of these Indian IST firms as multinationals in the global market. Applying the theoretical framework of national innovation system (NIS), the study establishes that origin of Indian IST multinationals are critically linked to the overall policy environment and strategic government intervention in skill formation, development of supporting institutions, proactive role of Indian households in undertaking human capital investment and providing risk taking entrepreneurs, and also to the firm‐level business strategies. The Indian experience shows that the development of a suitable NIS is required if other developing countries are aspiring to build their capability in the IST industry.

Suggested Citation

  • Pradhan, Jaya Prakash, 2007. "National Innovation System and the Emergence of Indian Information and Software Technology Multinationals," MPRA Paper 12359, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:12359
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    References listed on IDEAS

    as
    1. Jaya Prakash Pradhan, "undated". "Growth of Indian Multinationals in the World Economy: Implications for Development," Working Papers 0704, Institute for Studies in Industrial Development (ISID).
    2. Pradhan, Jaya Prakash & Abraham, Vinoj, 2004. "Overseas Mergers and Acquisitions by Indian Enterprises: Patterns and Motivations," MPRA Paper 17076, University Library of Munich, Germany.
    3. 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.
    4. Jaya Prakash Pradhan & Abhinav Alakshendra, "undated". "Overseas Acquisition Versus Greenfield Foreign Investment: Which Internationalization Strategy is better for Indian Pharmaceutical Enterprises?," Working Papers 0607, Institute for Studies in Industrial Development (ISID).
    5. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    6. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 365-379, June.
    7. Peter J Buckley, 1988. "The Limits of Explanation: Testing the Internalization Theory of the Multinational Enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(2), pages 181-193, June.
    8. Rugman, Alan M, 1986. "New Theories of the Multinational Enterprise: An Assessment of Internalization Theory," Bulletin of Economic Research, Wiley Blackwell, vol. 38(2), pages 101-118, May.
    9. Pradhan, Jaya Prakash, 2005. "Outward Foreign Direct Investment from India: Recent Trends and Patterns," MPRA Paper 12358, University Library of Munich, Germany.
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    Cited by:

    1. Narayanan K, 2008. "Technology Sourcing and Internationalisation of IT firms in India," Working Papers id:1703, eSocialSciences.
    2. Pradhan, Jaya Prakash, 2008. "Indian Direct Investment in Developing Countries: Emerging Trends and Development Impacts," MPRA Paper 12323, University Library of Munich, Germany.
    3. Anwar, Amar Iqbal & Hasse, Rolf & Rabbi, Fazli, 2008. "Location Determinants of Indian Outward Foreign Direct Investment: How Multinationals Choose their Investment Destinations?," MPRA Paper 47397, University Library of Munich, Germany.
    4. Jorge Niosi & Suma Athreye & Ted Tschang, 2012. "The Global Computer Software Sector," Chapters,in: Economic Development as a Learning Process, chapter 3 Edward Elgar Publishing.

    More about this item

    Keywords

    Information and Software Technologies; Outward FDI;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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