FOREIGN DIRECT INVESTMENT AND TECHNOLOGY SPILLOVER-- AN EVALUATION ACROSS DIFFERENT CLUSTERS IN INDIA

Pami Dua, B. N. Goldar and Smruti Ranjan Behera
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B. N. Goldar: V.K.R.V. Rao Centre for Studies in Globalization Institute of Economic Growth Delhi
Smruti Ranjan Behera: Department of Economics Shyamlal College, University of Delhi,Delhi

No 200, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: The paper attempts to explore the technology spillover effects of Foreign Direct Investment (FDI) in Indian manufacturing industries across different selected clusters in India. To measure the spillover effect to domestic firms in a particular cluster, a model is used that combines an innovative production function with a conventional production function. The model parameter estimates provide an evaluation of the technology spillovers in a cluster and the inter-cluster spillovers taking place in various regions. The empirical findings reveal significant variations across clusters in regard to spillovers. While some clusters benefit from foreign firm presence and technological stock within the cluster, a more commonly observed pattern is that domestic firms in a cluster gain from the presence of foreign firms in other clusters of the region and spillovers from technological stock in the regions. In some clusters, productivity enhancing effects of investment climates is visible, but in several others there is no such effect.

Keywords: Foreign Direct Investment; Technology Spillover; Clusters; Firm location (search for similar items in EconPapers)
JEL-codes: L6 O1 O41 R12 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011-08
New Economics Papers: this item is included in nep-cse, nep-dev, nep-eff, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Foreign Direct Investment and Technology Spillover: An Evaluation Across Different Clusters in India (2011)
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