IDEAS home Printed from https://ideas.repec.org/a/sae/emeeco/v16y2024i1p130-142.html
   My bibliography  Save this article

Impacting Instruments for Export Competitiveness: Evidence from India and China in the Global Manufacturing Market

Author

Listed:
  • Sayed Gulzar Ganai
  • Abdul Hamid Mir
  • Showkat Ahmad Bhat
  • Javid Ahmad Khan

Abstract

This study attempts to find the impacting instruments of export competitiveness for India and China by utilizing the revealed comparative advantage index and panel data regression during 2001–2020. The top 10 product groups at HS two-digit level were selected for analysis in the sample economies. The results revealed that random effect analysis remained more significant than the fixed effect for these economies. The random effect analysis showed that the top positively impacting variables with a high magnitude for Chinese export competitiveness are foreign direct investment (FDI) and research and development (R&D), followed by relative export prices (REP). The wage rate is the only factor that remained negative in magnitude for China. On the other hand, India tried to absorb FDI toward making the domestic market strong along with R&D, which has significantly impacted its growing competitiveness in the global market. REP negatively impacted Indian competitiveness with a high magnitude, followed by the real effective exchange rate. China has remained entirely integrated with the international market through joint ventures and multi-national companies and has promoted its exports in an improved form in the global market as compared to India. Moreover, China remained quite active in promoting the competitiveness of its manufactured product lines through investing in R&D and gross fixed capital formation, which contributed a significant part to its export competitiveness. In contrast, such investments remained relatively unresponsive for India. JEL Classification C33, F14, F15, F19

Suggested Citation

  • Sayed Gulzar Ganai & Abdul Hamid Mir & Showkat Ahmad Bhat & Javid Ahmad Khan, 2024. "Impacting Instruments for Export Competitiveness: Evidence from India and China in the Global Manufacturing Market," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(1), pages 130-142, January.
    • Handle: RePEc:sae:emeeco:v:16:y:2024:i:1:p:130-142
    DOI: 10.1177/09749101221146423
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/09749101221146423
    Download Restriction: no
    File URL: https://libkey.io/10.1177/09749101221146423?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Robert C. Feenstra & Shang-Jin Wei, 2010. "Introduction to "China's Growing Role in World Trade"," NBER Chapters, in: China's Growing Role in World Trade, pages 1-31, National Bureau of Economic Research, Inc.
    2. L. Nachum & J. H. Dunning & G. G. Jones, 2000. "UK FDI and the Comparative Advantage of the UK," The World Economy, Wiley Blackwell, vol. 23(5), pages 701-720, May.
    3. Robert C. Feenstra & Shang-Jin Wei, 2010. "China's Growing Role in World Trade," NBER Books, National Bureau of Economic Research, Inc, number feen07-1.
    4. Rajesh K. Pillania, 2006. "Leveraging knowledge for sustainable competitiveness in SMEs," International Journal of Globalisation and Small Business, Inderscience Enterprises Ltd, vol. 1(4), pages 393-406.
    5. Feenstra, Robert C. & Wei, Shang-Jin (ed.), 2010. "China's Growing Role in World Trade," National Bureau of Economic Research Books, University of Chicago Press, number 9780226239712, September.
    6. Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, April.
    7. Liu, Xielin & White, Steven, 2001. "Comparing innovation systems: a framework and application to China's transitional context," Research Policy, Elsevier, vol. 30(7), pages 1091-1114, August.
    8. Arvind Panagariya, 2007. "Why India Lags Behind China and How It Can Bridge the Gap," The World Economy, Wiley Blackwell, vol. 30(2), pages 229-248, February.
    9. Robert M. Salomon & J. Myles Shaver, 2005. "Learning by Exporting: New Insights from Examining Firm Innovation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 431-460, June.
    10. Will Mitchell & J Myles Shaver & Bernard Yeung, 1993. "Performance Following Changes of International Presence in Domestic and Transition Industries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 647-669, December.
    11. T.N. Srinivasan & Vani Archana, 2011. "Determinants of Export Decision of Indian Firms: A Primary Data Analysis," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(2), pages 6-35, July.
    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. Jarreau, Joachim & Poncet, Sandra, 2012. "Export sophistication and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 97(2), pages 281-292.
    2. Wolfgang Keller & Ben Li & Carol H. Shiue, 2011. "China’s Foreign Trade: Perspectives From the Past 150 Years," The World Economy, Wiley Blackwell, vol. 34(6), pages 853-892, June.
    3. Thorbecke, Willem, 2015. "China–US trade: A global outlier," Journal of Asian Economics, Elsevier, vol. 40(C), pages 47-58.
    4. He, Xinming & Rizov, Marian & Zhang, Xufei, 2022. "Workforce size adjustment as a strategic response to exchange rate shocks: A strategy-tripod application to Chinese firms," Journal of Business Research, Elsevier, vol. 138(C), pages 203-213.
    5. Mallick, Sushanta & Marques, Helena, 2016. "Pricing strategy of emerging market exporters in alternate currency regimes: The role of comparative advantage," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 68-81.
    6. Chen, Liming & Felipe, Jesus & Kam, Andrew J.Y. & Mehta, Aashish, 2021. "Is employment globalizing?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 74-92.
    7. Fariha Kamal, 2019. "A Portrait of US Factoryless Goods Producers," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 425-447, National Bureau of Economic Research, Inc.
    8. José de Sousa & Laura Hering & Sandra Poncet, 2015. "Has trade openness reduced pollution in China?," Working Papers 2015-11, CEPII research center.
    9. Lin, Faqin & Hu, Cui & Fuchs, Andreas, 2019. "How do firms respond to political tensions? The heterogeneity of the Dalai Lama Effect on trade," China Economic Review, Elsevier, vol. 54(C), pages 73-93.
    10. van der Wouden, Frank, 2022. "Are Chinese cities getting smarter in terms of knowledge and technology they produce?," World Development, Elsevier, vol. 150(C).
    11. Frankel, Jeffrey, 2016. "Globalization and Chinese Growth: Ends of Trends?," Working Paper Series 16-029, Harvard University, John F. Kennedy School of Government.
    12. Yang, Chih-Hai & Tsou, Meng-Wen, 2022. "Exports and the demand for skilled labor in China: Do foreign ownership and trade type matter?," Economic Modelling, Elsevier, vol. 106(C).
    13. Fan, Peilei, 2018. "Catching Up in Economic Transition: Innovation in the People’s Republic of China and India," ADBI Working Papers 809, Asian Development Bank Institute.
    14. Chih‐Hai Yang, 2021. "Do exporters have markup premiums and why (not)? Evidence from China," The World Economy, Wiley Blackwell, vol. 44(4), pages 956-979, April.
    15. Pritish K. Sahu, 2016. "Malaysia's Domestic Value Added Export: The Role of Governance and Strategic Policy Reforms," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1578-1584.
    16. Shang-Jin Wei & Yinxi Xie, 2022. "On the Wedge Between the PPI and CPI Inflation Indicators," Staff Working Papers 22-5, Bank of Canada.
    17. Cui Hu & Faqin Lin & Yong Tan & Yihong Tang, 2019. "How exporting firms respond to technical barriers to trade?," The World Economy, Wiley Blackwell, vol. 42(5), pages 1400-1426, May.
    18. Boeing, Philipp, 2014. "China's R&D subsidies: Allocation and effectiveness," ZEW Discussion Papers 14-103, ZEW - Leibniz Centre for European Economic Research.
    19. Joshua Aizenman & Rajeswari Sengupta, 2011. "Global Imbalances: Is Germany the New China? A Skeptical View," Open Economies Review, Springer, vol. 22(3), pages 387-400, July.
    20. Xia, Tianjiao & Liu, Xiaohui, 2022. "The innovation paradox of TMT political capital in transition economy firms," Journal of Business Research, Elsevier, vol. 142(C), pages 775-790.

    More about this item

    Keywords

    Export competitiveness; RCA; India; China; manufacturing; FDI;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F19 - International Economics - - Trade - - - Other

    Statistics

    Access and download statistics

    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:sae:emeeco:v:16:y:2024:i:1:p:130-142. 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: SAGE Publications (email available below). General contact details of provider: http://www.emergingmarketsforum.org/ .

    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.