Multinational Firms and the Evolution of the Indian Software Industry

38 Pages Posted: 3 Mar 2003

See all articles by Suma Athreye

Suma Athreye

Brunel University London - Brunel Business School

Date Written: December 12, 2002

Abstract

The Indian software industry appears to provide a startling confirmation of the benefits of multinational investment in a fledgling industrial sector. The main question explored in this paper is how and why this happened. We find that multinational firms had an important catalysing effect on the industry's evolution, even though foreign firms established by expatriate Indians probably exerted more competitive pressure. We do not accept a popular view, which ascribes this benign influence to the development of human capital. We argue it was tight labour markets due to foreign competition, which induced domestic firms to both acquire unique organisational capabilities and to improve the value-adding strategies of multinational firms.

Keywords: Indian software, industry evolution, firm capabilities, competition effects, multinational firms

JEL Classification: L0, L1, L2, L8, J2, J3, F2, O0

Suggested Citation

Athreye, Suma S., Multinational Firms and the Evolution of the Indian Software Industry (December 12, 2002). Available at SSRN: https://ssrn.com/abstract=361680 or http://dx.doi.org/10.2139/ssrn.361680

Suma S. Athreye (Contact Author)

Brunel University London - Brunel Business School ( email )

Kingston Lane
Eastern Gateway Building
Uxbridge, Middlesex UB8 3PH
United Kingdom

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