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Foreign Investment and Productivity: A Study of Post-reform Indian Industry

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  • Patibandla, Murali
  • Sanyal, Amal

Abstract

The paper uses firm level panel data for Indian industries in the post-reform period to study the direct and indirect productivity effects generated by foreign investment. It finds no evidence that foreign investment directly increased firm-level productivity, nor that R&D spending was more productive in firms or sectors with higher foreign investment. It however finds strong evidence that local firms benefited from foreign investment in their industries. These benefits are higher for larger firms and those that do more business domestically.

Suggested Citation

  • Patibandla, Murali & Sanyal, Amal, 2005. "Foreign Investment and Productivity: A Study of Post-reform Indian Industry," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 1(1), pages 1-17, June.
    • Handle: RePEc:ags:reapec:143483
    DOI: 10.22004/ag.econ.143483
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    References listed on IDEAS

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    Cited by:

    1. Keshari, Pradeep Kumar, 2013. "Comparative performance of foreign affiliates and domestic firms in the Indian machinery industry," MPRA Paper 33076, University Library of Munich, Germany, revised 20 Apr 2013.
    2. Marin, Anabel & Sasidharan, Subash, 2010. "Heterogeneous MNC subsidiaries and technological spillovers: Explaining positive and negative effects in India," Research Policy, Elsevier, vol. 39(9), pages 1227-1241, November.
    3. Pradeep Kumar Keshari, 2011. "Efficiency Spillovers from FDI in the Indian Machinery Industry: A Firm Level Study Using Panel Data Models," Working Papers id:4195, eSocialSciences.
    4. Anabel Marin & Ionara Costa, 2010. "Thinking locally: exploring the importance of a subsidiary-centred model of FDI-related spillovers in Brazil," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 3(1), pages 87-107.
    5. Arpita Ghose & Chandrima Chakraborti, 2013. "The Relative Role of Imports and Exports in Explaining Productivity of Indian Bio-Pharmaceutical Firms: Evidence from Non Parametric Data Envelopment Analysis," Foreign Trade Review, , vol. 48(2), pages 165-201, May.

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