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Exporting through technological capability: econometric evidence from India's pharmaceutical and electrical/electronics firms

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  • Saradindu Bhaduri
  • Amit Ray

Abstract

Contrary to conventional wisdom based on the product cycle and technology gap models, this paper argues that the technology factor can prove to be a key determinant of manufactured exports from less-developed countries (LDCs). The technological advantages enjoyed by LDCs rest on a very different foundation, technological capability, rather than on major technological advancements or breakthroughs. This paper attempts to capture and analyse how technological capability augments export competitiveness of LDC enterprises by introducing quantifiable concepts of technological capability and estimating econometric models of firm-level export performance for two R&D-intensive industries in India, pharmaceuticals and electronics/electricals. The results of our econometric analysis provide new insights into the relationship between technological capability and export performance, highlighting significant inter-industry differences. We find that simple production engineering capabilities augment exports of both sectors, while efficiency of reverse engineering proves to be particularly important for pharmaceutical exports only.

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  • Saradindu Bhaduri & Amit Ray, 2004. "Exporting through technological capability: econometric evidence from India's pharmaceutical and electrical/electronics firms," Oxford Development Studies, Taylor & Francis Journals, vol. 32(1), pages 87-100.
    • Handle: RePEc:taf:oxdevs:v:32:y:2004:i:1:p:87-100
    DOI: 10.1080/1360081042000184138
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    References listed on IDEAS

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    1. Giovanni Dosi & Keith Pavitt & Luc Soete, 1990. "The Economics of Technical Change and International Trade," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1990, March.
    2. Sanjaya Lall, 1987. "Learning to Industrialize," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-18798-0, September.
    3. Sanjaya Lall, 1985. "Multinationals, Technology and Exports," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-17952-7, September.
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    Cited by:

    1. Maitri Ghosh & Saikat Sinha Roy, 2018. "Foreign Direct Investment, Firm Heterogeneity, and Exports: An Analysis of Indian Manufacturing," Asian Development Review, MIT Press, vol. 35(1), pages 27-51, March.
    2. Wignaraja, Ganeshan, 2008. "FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia," MERIT Working Papers 2008-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Ganeshan Wignaraja, 2013. "Understanding Innovation in Production Networks in East Asia," Trade Working Papers 23395, East Asian Bureau of Economic Research.
    4. Wignaraja, Ganeshan, 2008. "Foreign ownership, technological capabilities and clothing exports in Sri Lanka," Journal of Asian Economics, Elsevier, vol. 19(1), pages 29-39, February.
    5. Chiara Franco & Subash Sasidharan, 2009. "MNEs and Export Spillovers: An Analysis of Indian Manufacturing Industries," Working Papers 2009-049, Madras School of Economics,Chennai,India.
    6. Pulak Mishra & Neha Jaiswal, 2017. "Impact of Mergers and Acquisitions on Firms’ Export Competitiveness," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(1), pages 1-20, March.
    7. Krammer, Sorin M.S. & Strange, Roger & Lashitew, Addisu, 2018. "The export performance of emerging economy firms: The influence of firm capabilities and institutional environments," International Business Review, Elsevier, vol. 27(1), pages 218-230.
    8. Tirta Mursitama, 2006. "Creating relational rents: The effect of business groups on affiliated firms’ performance in Indonesia," Asia Pacific Journal of Management, Springer, vol. 23(4), pages 537-557, December.
    9. Wignaraja, Ganeshan, 2006. "Foreign Ownership, Technological Capabilities and Exports: Evidence from 205 Clothing Firms in Sri Lanka," MERIT Working Papers 2006-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Jung-In Yeon & Jeong-Dong Lee & Chulwoo Baek, 2021. "A tale of two technological capabilities: economic growth revisited from a technological capability transition perspective," The Journal of Technology Transfer, Springer, vol. 46(3), pages 574-605, June.
    11. Amit Shovon Ray, 2008. "Emerging through Technological Capability: An Overview of India’s Technological Trajectory," Working Papers id:1816, eSocialSciences.
    12. David M. Kemme & Alex Nikolsko-Rzhevskyy & Deepraj Mukherjee, 2014. "Foreign Capital, Spillovers and Export Performance in Emerging Economies: Evidence from Indian IT Firms," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 681-692, November.
    13. Suresh Ramaiah & Gopal Krishna Roy, 2021. "Determinants of Exports Behaviour of India’s Agro-processing Firms: Role of Technology, Imported Raw Materials and Logistics Infrastructure," Vision, , vol. 25(2), pages 201-208, June.
    14. Wignaraja, Ganeshan, 2012. "Innovation, learning, and exporting in China: Does R&D or a technology index matter?," Journal of Asian Economics, Elsevier, vol. 23(3), pages 224-233.
    15. Franco, Chiara & Sasidharan, Subash, 2010. "MNEs, technological efforts and channels of export spillover: An analysis of Indian manufacturing industries," Economic Systems, Elsevier, vol. 34(3), pages 270-288, September.
    16. Wignaraja, Ganeshan, 2012. "Do Exporting Firms in the People’s Republic of China Innovate?," ADBI Working Papers 365, Asian Development Bank Institute.
    17. Dixit, M. R. & Sharma, Sunil & Karna, Amit, 2007. "Role of ‘corporate persistence’ and ‘environmental support’ in building breakthrough capability: Empirical investigation of Samsung’s initiatives in memory and microwave oven business," IIMA Working Papers WP2007-10-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    18. Sidheswar Panda & Ruchi Sharma, 2023. "Does Innovation Spur Export Performance across Countries? An Investigation from Meta-regression Analysis," Millennial Asia, , vol. 14(3), pages 341-359, September.
    19. Nam, Hyun-Jung & An, Yohan, 2017. "Patent, R&D and internationalization for Korean healthcare industry," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 131-137.
    20. Alex Warren-Rodríguez, 2008. "An Exploration of Factors Shaping Technology-Upgrading Efforts in Mozambican Manufacturing Firms," Working Papers 159, Department of Economics, SOAS University of London, UK.

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