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FDI, Technological Choices and Spillovers in Indian Manufacturing Industries

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Globalization of Indian Industries

Part of the book series: India Studies in Business and Economics ((ISBE))

Abstract

With inflow of FDI and MNE operations in the Indian economy in the 1990s, the domestic firms had to face a very crucial issue of technology choice in the face of competition. On the one hand, technology could be imported in both embodied and disembodied form, while on the other hand, thrust could be given to develop local R&D. Again, there could also be a possibility of combining both. This chapter tries to analyse the factors influencing the firms’ technological choices across high technology, medium-high technology, medium-low technology and low-technology industries in the post reforms era. In this process, the role of the ownership of firms and technological spillovers is taken into account. A logit framework is constructed to empirically explore the technology choice determinants. Results suggest that foreign ownership and technological spillovers have significant effect on the technology choices of most Indian manufacturing industries. Dependence on imported foreign technical know-how is also evident.

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Notes

  1. 1.

    The classification of manufacturing industries into categories is based on R&D intensities (ISIC Revision 3). However, we have considered chemicals as high technology industry as it is inclusive of drug and pharmaceuticals.

  2. 2.

    We are not dealing with technological licenses in this analysis due to data unavailability.

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Acknowledgments

An earlier version of the paper was presented at the VI-th Annual Conference of the Academy of Innovation and Entrepreneurship (AIE), University of Oxford, United Kingdom, 2013 and the VIII Annual International Conference of Forum for Global Knowledge Sharing held at the IIT, Bombay, 2013. The authors thank Biswanath Goldar, K.L. Krishna, K. Narayanan, Mousumi Dutta, N.S Siddharthan, Rakesh Basant, Sarmila Banerjee and Xiaolan Fu for comments on different stages of this work. The authors are grateful to the Department of Economics, Jadavpur University, Kolkata, for permission to use the Prowess Database. However, the responsibility of errors, if any, lies with the authors.

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Authors and Affiliations

  1. Bethune College, 181 Bidhan Sarani, Kolkata, 700006, India

    Maitri Ghosh

  2. Department of Economics, Jadavpur University, Kolkata, 700032, India

    Saikat Sinha Roy

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  1. Maitri Ghosh
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  2. Saikat Sinha Roy
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Correspondence to Maitri Ghosh .

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Editors and Affiliations

  1. Faculty of Economics and Business, KU Leuven Universit, Antwerpen, Belgium

    Filip De Beule

  2. Humanities and Social Sciences, Indian Institute of Technology Bombay, Mumbai, Maharashtra, India

    K. Narayanan

Appendix

Appendix

See Tables 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.10 and 8.11.

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Ghosh, M., Roy, S.S. (2016). FDI, Technological Choices and Spillovers in Indian Manufacturing Industries. In: De Beule, F., Narayanan, K. (eds) Globalization of Indian Industries. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-0083-6_8

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