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Manchester Grand Hyatt, Gaslamp C
Association of Indian Economic and Financial Studies
Topics in Trade, Innovation , and Economic Development
Friday, Jan. 3, 2020 12:30 PM - 2:15 PM (PDT)
- Chair: Kusum Mundra, Rutgers University-Newark
Impact of Financing Access and Corporate Governance on Firm Productivity Effect of R&D Spillover in India: Is It Stock of Innovation or Lack of Local Spill‐Over?
AbstractGlobal productivity growth has either stagnated or declined despite continued technological innovations. Understanding the root causes behind this paradox in the context of rapidly growing economies like India can help highlight whether local knowledge diffusion plays a role in explaining firm‐level productivity differences along with their own innovation stock, or whether sources of financing or corporate diversity matter in this relationship. The rise of knowledge‐intensive intangibles that arise from knowledge stock (R&D activities) has dramatically magnified the importance of innovation. Using financial data for over 9,500 firms during 1994‐95 to 2014‐15 and by clustering firms across industries, we assess the impact of R&D stock that is external to the firm through estimating both within (intra) and between (inter) industry spillovers, and find that R&D performing firms benefit from ‘within’ industry spillover rather than ‘between’ industry spillovers, which nevertheless benefit non‐R&D performing firms. Besides, we find that more innovative firms tend to have better access to financing and therefore achieve higher productivity via both types of industry‐level knowledge spillover. The paper concludes that financially unconstrained firms and firms with greater corporate diversity derive positive national industry‐level spillover effects as they tend to be more productive/innovative, reflecting intra (inter‐industry) spillover as a type of domestic spillover or local value‐chain effect – rarely explored in the technological innovation literature.
Exports, FDI and Productivity: A Study of Indian Organized Manufacturing since 2000
AbstractUnder the firm self-selection hypothesis, firm’s heterogeneity leads to self-selection in the structure of international trade and business and the productivity distribution of foreign firms dominates that of export firms, which in turn dominates that of non-export firms. In other words, exporting firms are more productive than non-exporting firms not essentially as an outcome of exporting but because the most productive firms are able to overcome the costs of entering export markets. On the contrary, under the learning by export hypothesis, an exporting firm is more productive than non-exporting firm because of the result of exporting activity itself. A firm upon exposure to export markets enhances its capabilities and performance through productivity transformation derived from learning-by-doing and knowledge spill-overs brought about by exposure to the knowledge stocks of its trading partners. Simply put, firm self-selection hypothesis concludes that those who are productive, they can export; while learning by exporting hypothesis suggests that those who export become more productive. It is clear, both firm selection and learning by exporting hypotheses focus on studying and analysing relationships and interlinkages between exporting activities of firm and firm-level productivity. One of the major aspects that is missing in such studies is the focus on FDI and on Exports-FDI linkages. Thus, the literature also broadly ignores the inter-linkages between exports and FDI and their combined effect on firm’s productivity. This paper tries to fill this important gap, especially in the Indian context.
Re-Thinking the Aid-Growth Relationship: A Network Approach
AbstractOver forty years of conventional economic analysis has not reached consensus on the effect of foreign aid on recipient country growth. We provide new insight into this relationship by using a network approach to characterize the topological properties of the OECD foreign aid network. Viewing the OECD foreign aid community as an interdependent and complex system, we characterize not only the amount of aid but also the position of both donor and recipient within the network. We find that the degree centrality of the recipient, with an edge inclusion threshold that sets a minimum share of a donor’s aid to a particular recipient, is significantly correlated with the growth impact of that donor’s aid. Contrarily, aid is uncorrelated with growth with a recipient-side filter on the importance of the donor to the recipient. These results suggest that the importance of a recipient within the donor’s network, rather than the volume of aid alone, is associated with the growth impact of bilateral aid. We explore mechanisms for these findings that include the complementarity of aid from multiple attentive donors. Our findings speak to the aid-growth puzzle and suggest that network metrics may illuminate non-obvious channels of aid impact.
An Analysis of Customs Transactions of a Developing Country: The Case of Ecuador
AbstractWe utilize detailed customs export transactions from Ecuador for the period 2003 to 2009 to examine the characteristics and dynamics of exporting ﬁrms. Consistent with the previous literature, most Ecuadorian exporters export to few destinations, and relatively few exporters export to multiple destinations during this period. Moreover, a large number of Ecuadorian exporters in a market does not necessarily translate into high export values, suggesting the presence of many small exporters. While the US remains Ecuadors largest single trading partner in terms of export value, we also note that the share of Central and South American countries increased signiﬁcantly over this period. The positive relationship between initial export values and export performance appears to be more consistent in the higher deciles of initial export values. On average, Ecuadorian exporters also prefer initial export markets with greater ease of entry. Our regression results indicate that product diversiﬁcation, geographic diversiﬁcation, and the number of destination-speciﬁc transactions have a positive eﬀect on ﬁrm-level export values.
University of Bath
Ram Upendra Das,
Centre for Regional Trade
University of Hull
University of Wisconsin-La Crosse
University of Arkansas
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- D2 - Production and Organizations