IDEAS home Printed from https://ideas.repec.org/p/unm/unuint/199804.html
   My bibliography  Save this paper

Foreign Firms and Technology Transfer Knowledge Spillovers to Indian Manufacturing Firms

Author

Listed:
  • Kathuria, Vinish

    (Indira Gandhi Institute of Development Research)

Abstract

The present paper uses techniques from stochastic production frontier and panel data literature to test for the spillover hypothesis that 'presence of foreign firms and disembodied technology import in a sector leads to higher productivity growth for domestic firms'. The study uses panel data for 368 medium and large-sized Indian manufacturing firms for the period 1975-76 to 1988-89. The results indicate that the domestic firms tend to benefit from foreign-owned firms irrespective of the technological and production requirement of the sectors. However, once the initial level of productivity gap is considered, it is firms belonging to the 'scientific' subgroup that experience knowledge spillovers from the presence of foreign-owned firms. The other source of knowledge spillover i.e., disembodied technology import in the sector does not attain significance in either variant of the model. Furthermore, the result of previous studies that find knowledge spillovers in low-tech sectors where technology-gap is smaller between foreign-owned firms and local firms is also not validated in the present study.

Suggested Citation

  • Kathuria, Vinish, 1998. "Foreign Firms and Technology Transfer Knowledge Spillovers to Indian Manufacturing Firms," UNU-INTECH Discussion Paper Series 1998-04, United Nations University - INTECH.
    • Handle: RePEc:unm:unuint:199804
    as

    Download full text from publisher

    File URL: https://www.merit.unu.edu/publications/discussion-papers/9804.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Local Technological Capability and Productivity Spillovers from FDI in the Uruguayan Manufacturing Sector," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 11, pages 177-186, Palgrave Macmillan.
    2. Zvi Griliches, 1998. "Productivity and R&D at the Firm Level," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 100-133, National Bureau of Economic Research, Inc.
    3. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    4. Wang, Jian-Ye & Blomstrom, Magnus, 1992. "Foreign investment and technology transfer : A simple model," European Economic Review, Elsevier, vol. 36(1), pages 137-155, January.
    5. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Technology, Market Characteristics and Spillovers," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 10, pages 160-176, Palgrave Macmillan.
    6. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    7. Bairam, Erkin I, 1987. "The Verdoorn Law, Returns to Scale and Industrial Growth: A Review of the Literature," Australian Economic Papers, Wiley Blackwell, vol. 26(48), pages 20-42, June.
    8. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
    9. Raut, Lakshmi K., 1995. "R & D spillover and productivity growth: Evidence from Indian private firms," Journal of Development Economics, Elsevier, vol. 48(1), pages 1-23, October.
    10. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    11. Rosenberg,Nathan, 1994. "Exploring the Black Box," Cambridge Books, Cambridge University Press, number 9780521459556.
    12. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    13. Richard E. Caves, 1992. "Industrial Efficiency in Six Nations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031930, December.
    14. Zvi Griliches, 1998. "The Search for R&D Spillovers," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 251-268 National Bureau of Economic Research, Inc.
    15. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    16. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
    17. Ferrantino, Michael J, 1992. "Technology Expenditures, Factor Intensity, and Efficiency in Indian Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 689-700, November.
    18. Ariel Pakes & Mark Schankerman, 1984. "The Rate of Obsolescence of Patents, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Chapters, in: R&D, Patents, and Productivity, pages 73-88, National Bureau of Economic Research, Inc.
    19. Baumol, William J. & Nelson, Richard R. & Wolff, Edward N. (ed.), 1994. "Convergence of Productivity: Cross-National Studies and Historical Evidence," OUP Catalogue, Oxford University Press, number 9780195083903.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vinish Kathuria, 2000. "Productivity spillovers from technology transfer to Indian manufacturing firms," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 343-369, April.
    2. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    3. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1033-1082, Elsevier.
    4. Della Temenggung, 2007. "Productivity Spillovers from Foreign Direct Investment: Indonesian Manufacturing Industry’s Experience 1975-2000," DEGIT Conference Papers c012_048, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Pradhan, Jaya Prakash, 2004. "FDI spillovers and local productivity growth: evidence from Indian pharmaceutical industry," MPRA Paper 17080, University Library of Munich, Germany.
    6. Sinani, Evis & Meyer, Klaus E., 2004. "Spillovers of technology transfer from FDI: the case of Estonia," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 445-466, September.
    7. Yuko Kinoshita, 2000. "R&D and technology spillovers via FDI: Innovation and absorptive capacity," CERGE-EI Working Papers wp163, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    8. Li, Xiaoying & Liu, Xiaming & Parker, David, 2001. "Foreign direct investment and productivity spillovers in the Chinese manufacturing sector," Economic Systems, Elsevier, vol. 25(4), pages 305-321, December.
    9. Klaus E Meyer & Evis Sinani, 2009. "When and where does foreign direct investment generate positive spillovers? A meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1075-1094, September.
    10. Gachino, Geoffrey, 2007. "Foreign direct investment and firm level productivity - A panel data analysis," MERIT Working Papers 2007-016, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Mita Bhattacharya & Jong-Rong Chen & V. Pradeep Author-X-Name- V, 2008. "Productivity Spillovers In Indian Manufacturing Firms," Monash Economics Working Papers 30/08, Monash University, Department of Economics.
    12. V. Pradeep & Mita Bhattacharya & Jong-Rong Chen, 2017. "Spillover Effects of Research and Development, Exports and Foreign Investment on Productivity," Journal of South Asian Development, , vol. 12(1), pages 18-41, April.
    13. Ornaghi, Carmine, 2006. "Spillovers in product and process innovation: Evidence from manufacturing firms," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 349-380, March.
    14. Mahmut Yaşar & Catherine Paul, 2012. "Firm performance and knowledge spillovers from academic, industrial and foreign linkages: the case of China," Journal of Productivity Analysis, Springer, vol. 38(3), pages 237-253, December.
    15. Holger Görg & David Greenaway, 2016. "Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 9, pages 163-189, World Scientific Publishing Co. Pte. Ltd..
    16. Giuseppe Medda & Claudio Piga, 2014. "Technological spillovers and productivity in Italian manufacturing firms," Journal of Productivity Analysis, Springer, vol. 41(3), pages 419-434, June.
    17. Noor Aini Khalifah & Radziah Adam, 2009. "Productivity Spillovers from FDI in Malaysian Manufacturing: Evidence from Micro‐panel Data," Asian Economic Journal, East Asian Economic Association, vol. 23(2), pages 143-167, June.
    18. Liu, Xiaming & Parker, David & Vaidya, Kirit & Wei, Yingqi, 2001. "The impact of foreign direct investment on labour productivity in the Chinese electronics industry," International Business Review, Elsevier, vol. 10(4), pages 421-439, August.
    19. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 317-344.
    20. Jordaan, Jacob A., 2005. "Determinants of FDI-induced externalities: New empirical evidence for Mexican manufacturing industries," World Development, Elsevier, vol. 33(12), pages 2103-2118, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:unuint:199804. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ad Notten (email available below). General contact details of provider: https://edirc.repec.org/data/meritnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.