2017/09 LEM Working Paper Series

Efficiency, innovation, and imported inputs: determinants of export performance among Indian manufacturing firms

Marco Grazzi, Nanditha Mathew and Daniele Moschella
Export behavior, Innovation, Imported Inputs, Trade policy, India

  JEL Classifications
D22, F13, F14, L25, O33

This paper investigates the determinants of export behavior among Indian manufacturing firms, focusing in particular on the role of technology, cost and imported intermediate inputs. Our evidence suggests that innovation, in particular R&D, positively affects both firms’ probability to export and firms’ export volumes. We also find that imported intermediate inputs, incorporating foreign technology, play an important role in expanding export activities of firms. On the other hand, we find that higher productivity or lower unit labour costs are not systematically associated with the probability to enter export market, but they do positively affect export volumes.
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