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

Saradindu Bhaduri and Amit Ray

Oxford Development Studies, 2004, vol. 32, issue 1, 87-100

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.

Date: 2004
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DOI: 10.1080/1360081042000184138

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