Digitalization and Exports: A Case of Indian Organized Sector Manufacturing MSMEs

Sugandha Huria (), Kriti Sharma, Neha Jain () and Ashley Jose
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Sugandha Huria: Indian Institute of Foreign Trade
Kriti Sharma: International Food Policy Research Institute
Neha Jain: Indian Institute of Foreign Trade
Ashley Jose: Indian Institute of Foreign Trade

A chapter in FDI, MSMEs, Digitalization, and Green Industrialization, 2024, pp 79-101 from Springer

Abstract: Abstract Does digitalization promote the export of Indian manufacturing Micro, Small, and Medium Enterprises? We empirically address this under-researched area by using the Centre for Monitoring Indian Economy’s Prowess database consisting of around 800 manufacturing MSMEs for the period 1990–2019. The summary of the findings based on the robust econometric techniques such as the System Generalized Method of Moments and Dynamic Probit Regression Model, and employing three alternative definitions of digitalization, reveals that a higher level of digitalization of an Indian manufacturing MSME increases its export intensity. Also, a digitalized manufacturing MSME firm is more likely to enter the export market, vis-à-vis a non-digitalized one. In fact, the likelihood further increases if digitalization is complemented with technical knowledge. The findings advocate an urgent need for manufacturing MSMEs to go for digitalization to sustain and strengthen their contribution to the Indian economy, specifically in the post-COVID-19 era.

Date: 2024
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DOI: 10.1007/978-981-97-8999-3_5

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