Domestic Competition Spurs Exports: The Indian Example

29 Pages Posted: 15 Feb 2006

See all articles by Tushar Poddar

Tushar Poddar

International Monetary Fund (IMF) - Middle East and Central Asia Department

Date Written: September 2004

Abstract

India`s exports nearly tripled in the 1990s. Decomposing export growth shows that it has been driven by incumbent firms rather than the entry of new firms. By using a new panel on Indian firms and estimating a dynamic discrete-choice model of the firm`s decision to export, we find evidence that economic liberalization has led to greater domestic competition, spurring firm efficiency and increasing Indian firms` competitiveness and ability to export. We show that export growth has been an outcome of local firm innovation which has come about due to increased competitive pressure from FDI entry.

Keywords: India, FDI, Exports, Competition

JEL Classification: D21, F14, F23

Suggested Citation

Poddar, Tushar, Domestic Competition Spurs Exports: The Indian Example (September 2004). IMF Working Paper No. 04/173, Available at SSRN: https://ssrn.com/abstract=878998

Tushar Poddar (Contact Author)

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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