Digitalization and Exports: A case of Indian Manufacturing MSMEs

Sugandha Huria, Kriti Sharma (), Neha Jain () and Ashley Jose ()
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Kriti Sharma: Indian Institute of Foreign Trade (IIFT), New Delhi
Neha Jain: Indian Institute of Foreign Trade (IIFT), New Delhi
Ashley Jose: Indian Institute of Foreign Trade (IIFT), New Delhi

No 2261, Working Papers from Indian Institute of Foreign Trade

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 exports intensity. Also, a digitalized manufacturing MSME firm is more likely to enter the export market, vis-à-vis a nondigitalized 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 era.

Keywords: Digitalization; India; MSMEs; Exports; Servicification; firm-level analysis (search for similar items in EconPapers)
JEL-codes: D24 F61 L81 L86 O33 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022
New Economics Papers: this item is included in nep-int and nep-sbm
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