EconPapers    
Economics at your fingertips  
 

Foreign Equity and Technological Capabilities: a Comparison of Joint-Venture and National Automotive Suppliers

Rajah Rasiah ()

Transnational Corporations Review, 2011, vol. 3, issue 2, 87-103

Abstract: Using the evolutionary framework, this paper examines differences in technological capabilities between joint-ventures with over 10% foreign equity and fully national owned suppliers located in the greater Delhi region. In a country where automotive manufacturing emerged from the relocation of foreign capital and with only 3 automobile assemblers supplying essentially the domestic market until 1991, India has experienced tremendous upward movement in firm-level technological capabilities to generate rapid growth in automotive exports to record a positive trade balance by 2000. Against the background of rapid expansion, this paper uses a sample of 84 tiers one and two suppliers to compare technological capabilities between joint-ventures with foreign equity and wholly national owned suppliers. The results show considerable participation of both joint-venture and national firms in cutting edge technological capabilities. The two tailed ¡®t' tests, and the knowledge intensity exercises show joint-ventures enjoying higher overall technological capabilities, training expense in payroll, process technology expenditure in sales and R&D expenditure in sales than national firms. The Tobit regressions show that once export-intensity and firm size is accounted for, joint-ventures enjoy a statistically significant higher technological capability with its superior process technology over national firms. Overall, the evidence shows that foreign equity is still important in the technological operations of automotive suppliers in India.

Keywords: Foreign equity; technological capability; automotive; India (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://tnc-online.net/journal/html/?291.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oul:tncr09:v:3:y:2011:i:2:p:87-103

Access Statistics for this article

More articles in Transnational Corporations Review from Ottawa United Learning Academy 1568 Merivale Rd. Suite # 618, Ottawa, Ontario, Canada K2G 5Y7.
Bibliographic data for series maintained by Denny Liao () and Jen Ma ().

 
Page updated 2021-10-12
Handle: RePEc:oul:tncr09:v:3:y:2011:i:2:p:87-103