Smruti Ranjan Behera

FOREIGN DIRECT INVESTMENT AND TECHNOLOGY SPILLOVER: EVIDENCE ACROSS INDIAN MANUFACTURING INDUSTRIES

The paper attempts to analyze the spillover effect of Foreign Direct Investment (FDI) across Indian manufacturing industries. Foreign presence by way of FDI brings new channels of technology spillover to the domestic industrial firms in the form of enhanced efficiency and diffusion of knowledge in the long-run. By carrying out Pedroni cointegration tests, the analysis tries to provide a long-run relationship between endogenous variables and explanatory variables, pertaining to technology spillovers across Indian manufacturing industries. We find that technology spillovers are relatively higher in industries like food products, textiles, chemicals, drugs and pharmaceuticals and non-metallic mineral products.

International Capital Mobility and Saving-Investment Relationship in the Newly Industrialized Countries

This paper investigates the Feldstein-Horioka coefficients and evaluates the degree of international capital mobility for ten newly industrialized countries (NICs) over the different sub-periods from 1970 to 2010. By applying the Pedroni and Westerlund cointegration tests, we find that saving and investment are indeed cointegrated. The estimated FH coefficients using FMOLS and DOLS are 0.24 and 0.33, respectively, for the period 1970–1980. Furthermore, the estimated FH coefficients reduce from 0.80 (FMOLS) in 1991–2000 to 0.36 (FMOLS) in 1970–1980. The small FH coefficients suggest that international capital mobility increased in the NICs during the sub-periods 1970–1980 and 2001–2010.

Technology Spillover and Determinants of Foreign Direct Investment: An Analysis of Indian Manufacturing Industries

This paper examines the technology spillover from foreign direct investment (FDI) and subsequently, determines the factors for FDI-participation in Indian manufacturing industries. The result based on a two-equation model facilitating the link between labor productivity and foreign presence suggests that foreign presence plays an important role in the diffusion of technology from foreign firms to domestic firms, provided the recipient firms have the capacity to absorb and adopt the foreign technology. Furthermore, the results suggest that industries experiencing decline in the tariff cost exhibit stronger growth in labor productivity. Finally, we find that large domestic market size and highly productive domestic sectors, are likely to attract more FDI from abroad.

SAVING–INVESTMENT DYNAMICS AND CAPITAL MOBILITY IN THE NEWLY INDUSTRIALIZED COUNTRIES

This paper examines the dynamics of saving–investment (S–I) relationship in a group of 10 newly industrialized countries (NICs) over the period from 1970 to 2010 using a panel error correction model. By applying the Pedroni and Westerlund cointegration tests, we find that the saving and investment are cointegrated. We apply the fully modified OLS and dynamic OLS to a set of panel error correction models to estimate the short-and long-run relationship between S–I rates and interest rate differentials. We find that the degree of capital mobility is higher when the NICs are more open to their capital control policies after 1980s.

Regional foreign direct investment and technology spillover: evidence across different clusters in India

ABSTRACT This paper examines whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms at the regional level, using firm-level panel dataset covering 22 manufacturing industries in India from 2000 to 2012. In order to estimate the productivity spillovers from FDI at the regional level, we select 10 industrial clusters across 4 regions in India. In estimating productivity, we control for a possible simultaneity bias by using semi-parametric estimation techniques. We find that local firms benefit from horizontal and vertical FDI, but the benefits from the latter are found to be substantially stronger. The absorptive capacity of domestic firms is highly relevant to harvest the spilled technology from foreign-owned firms. Furthermore, we find that domestic firms belonging to high-technology industries benefit more from FDI at the regional level. We also find that market concentration is a crucial conduit for firm innovation, technological upgradation, and having a direct effect on local firm total factor productivity.

Current account dynamics and capital mobility in the newly industrialized countries

This paper examines the current account dynamics in a group of ten newly industrialized countries (NICs) during the period 1980–2012 using a panel error-correction model. The model is also used to empirically test whether the degree of capital mobility is positively related to financial openness. The Chin-Ito (2006, 2008) financial openness index is used to classify the countries into different groups, and we place the countries in one group that are similar to each other in terms of their financial openness. Furthermore, to evaluate the extent of capital mobility over the different period from 1980 to 2012, the total period under study is divided into three sub-periods. The estimation results indicate that there exist long-run equilibrium relationships between domestic saving, investment, and current account in all groups regardless of their degree of financial openness. We find that more openness in terms of the capital account is associated with a higher degree of capital mobility in the case of NICs. The empirical result also indicates that the degree of capital mobility is higher in the first and third sub-period.

Technology Spillover of Foreign Direct Investment: An Analysis of Different Clusters in India

This paper explores the technology spillover effect of foreign direct investment (FDI) in Indian manufacturing industries across different clusters in India. To measure the spillover effect to domestic firms in a particular cluster, a model is used that combines an innovative production function with a conventional one. The empirical findings reveal significant variations across clusters with regard to spillovers. While some clusters benefit from cluster-specific foreign presence and technology stock, a more commonly observed pattern is that domestic firms in a cluster gain from the presence of foreign firms in other clusters of the region and region-specific technology stock.