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Technology Sourcing and Outward FDI: Comparison of Chemicals and Information Technology Industries in India

Savita Bhat () and Krishnan Narayanan ()
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Savita Bhat: Madras School of Economics, Chennai, India

Transnational Corporations Review, 2011, vol. 3, issue 2, 50-64

Abstract: The objective of the paper is to analyze the determinants of outward FDI by firms in a developing country like India. In particular, the study investigates the role of technology sourcing in determining outward FDI, in the presence of other firm specific factors. Further, it undertakes a comparative analysis of the factors influencing outward FDI of firms for two important industries in India, namely, chemicals and information technology (IT). The analysis confirms that technology sourcing, in particular, in-house R&D is important for the decision of the firm to choose outward FDI. In the chemical industry even import of capital goods, designs, drawings and blueprints seem to be positively influencing outward investments. Size of the firm, global network linkages, skill and type of product also emerge to be important factors in determining outward FDI in both the industries.

Keywords: Outward FDI; TWMNE; Chemicals; Information Technology; India (search for similar items in EconPapers)
Date: 2011
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