ABSTRACT
The huge surge of FDI inflows into developing countries in the last few decades has drawn considerable attention of researchers regarding the spillover benefits from FDI on productivity and export performance of Indian manufacturing firms. However, this study mainly focuses on the export spillovers from FDI across technology sectors as defined by OECD, namely, High Technology (HT), Medium High Technology (MHT), Medium Low Technology (MLT) and Low Technology (LT) sectors. According to CMIE data, the Medium Technology sector (MLT and MHT) is predominant in Indian industry in terms of output while the LT sector is the main exporter and the HT sector draws the highest Research and Technology stock of the industry. These structural differences among the sectors have drawn the attention of the scholars to investigate whether the FDI has different impact on export performance of the firms in these sectors.. Following recent studies, we divided the FDI spillover channels into competition (domestic market activity), information (export activity), skill (proxy to measure spillovers from higher foreign skills) and imitation (R&D and technology import) spillovers. Our findings show that most of the spillover channels do not influence export decision or export activity of the Indian firms except the firms in the MHT sector. India seems to act like an export platform for foreign firms. The study also found that in-house R&D activity and technology import enhances the export performance of Indian firms.
