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India's specialisation in IT exports: Offshoring can't defy gravity

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  • Meyer, Thomas

Abstract

India’s actual export specialisation in IT services is unrivalled by any comparable country and it is evidence of a strong comparative advantage. This paper finds that India owes its IT specialisation in part to its reliance on offshoring - driven by the supply of well-educated, English-speaking and affordable workers - but also to a shift away from high-tech manufacturing exports. Going forward, India's specialisation on IT and other high-tech exports may decline as rising wages erode one of the reasons for offshoring.

Suggested Citation

  • Meyer, Thomas, 2007. "India's specialisation in IT exports: Offshoring can't defy gravity," MPRA Paper 5780, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:5780
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    File URL: https://mpra.ub.uni-muenchen.de/5780/1/MPRA_paper_5780.pdf
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    References listed on IDEAS

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    1. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "The rise of offshoring: it's not wine for cloth anymore," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 59-102.
    2. Baldwin, Richard & Robert-Nicoud, Frédéric, 2007. "Offshoring: General Equilibrium Effects on Wages, Production and Trade," CEPR Discussion Papers 6218, C.E.P.R. Discussion Papers.
    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. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    5. Mary Amiti & Shang-Jin Wei, 2005. "Service Offshoring, Productivity, and Employment; Evidence from the United States," IMF Working Papers 05/238, International Monetary Fund.
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    Citations

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    Cited by:

    1. Eduardo Fernández-Arias & Charles Sabel & Ernesto H. Stein & Alberto Trejos, 2016. "Two to Tango: Public-Private Collaboration for Productive Development Policies," IDB Publications (Books), Inter-American Development Bank, number 94716, February.
    2. Mukherjee, Sanchita, 2009. "Technology intensity of Indian merchandise exports," MPRA Paper 35694, University Library of Munich, Germany.
    3. Ricardo Rozemberg & Daniela Ramos & Andrés López & Juan Carlos Hallak & Andrea González & Roberto Bisang, 2014. "Public-Private Collaboration on Productive Development Policies in Argentina," IDB Publications (Working Papers) 84496, Inter-American Development Bank.
    4. Ricardo Rozemberg & Daniela Ramos & Andrés López & Juan Carlos Hallak & Andrea González & Roberto Bisang, 2014. "Public-Private Collaboration on Productive Development Policies in Argentina," IDB Publications (Working Papers) 6410, Inter-American Development Bank.
    5. Wim Naudé & Riaan Rossouw, 2011. "Export diversification and economic performance: evidence from Brazil, China, India and South Africa," Economic Change and Restructuring, Springer, vol. 44(1), pages 99-134, April.
    6. Eduardo Fernández-Arias & Charles Sabel & Ernesto H. Stein & Alberto Trejos, . "Two to Tango: Public-Private Collaboration for Productive Development Policies," IDB Publications (Books), Inter-American Development Bank, number 7694, April.
    7. Johan Fourie & Dieter von Fintel, 2009. "World Rankings of Comparative Advantage in Service Exports," Working Papers 03/2009, Stellenbosch University, Department of Economics.

    More about this item

    Keywords

    International trade; comparative advantage; offshoring; India;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F1 - International Economics - - Trade
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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