Domestic Competition Spurs Exports: The Indian Example

Tushar Poddar

No 2004/173, IMF Working Papers from International Monetary Fund

Abstract: India's exports nearly tripled in the 1990s. Decomposing export growth shows that it has been driven by incumbent firms rather than the entry of new firms. By using a new panel on Indian firms and estimating a dynamic discrete-choice model of the firm's decision to export, we find evidence that economic liberalization has led to greater domestic competition, spurring firm efficiency and increasing Indian firms' competitiveness and ability to export. We show that export growth has been an outcome of local firm innovation which has come about due to increased competitive pressure from FDI entry.

Keywords: WP; firm characteristic; market share; joint venture; India; FDI; Exports; Competition; export behavior; firms entering; public sector firm; state-industry MNC export; firm ownership; MNC export activity; business house; Export performance; Productivity; Transnational corporations; Foreign direct investment; East Asia (search for similar items in EconPapers)
Pages: 29
Date: 2004-09-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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