Does FDI impact on technology choices of firms? An analysis of Indian manufacturing

Dr. Saikat Sinha Roy , Department of Economics, Jadavpur University, India

With rising inflow of FDI in the India since the 1990s, the firms had to face the crucial issue of technological choice in the face of competition. The firms can depend either on imported technology, resort to local R&D or combine both. This paper tries to analyze the factors influencing the firm’s technological choices in Indian manufacturing in the post reforms era. In this process, the role of ownership of firms and technology spillovers is taken into account. A multinomial logit framework is used to empirically explore the technology choice determinants. Results suggest that size of firms and imported raw materials are critical determining factors in explaining a firm’s choice to remain technologically active both in terms of investing in domestic R&D as well as importing foreign technical know-how. Technology embodied in capital goods imports and domestic inputs substitutes both local R&D and the choice to combine local technology efforts with imported technical know-how. While foreign ownership of firms does not induce local R&D, technology spillovers from both domestic and foreign firms have significant impact on the firm-level technology choices in Indian manufacturing.

About the speaker
Dr. Saikat Sinha Roy is a faculty in the Department of Economics, Jadavpur University, Kolkata. He holds an M. Phil. and a Ph.D. from the Centre for Development Studies, Trivandrum, India. Earlier, he completed his Masters in Economics from Calcutta University. Dr. Sinha Roy’s areas of academic interests include Trade and Development, Open Economy Macroeconomics, Applied Economics, and Issues relating to the Emerging Market Economies. Prior to joining the Jadavpur University, he was a Fellow at the Research and Information System for Developing Countries (RIS), New Delhi. He also worked briefly at the Asian Development Bank (ADB), India office, New Delhi. He was a British Academy of Social Sciences/ESRC/AHRC Visiting Fellow to Department of Economics, Lancaster University in 2009. He was also a University Grants Commission-DRS Visiting Fellow/Faculty to the Department of Economics, Calcutta University, Burdwan University and Kalyani University. His current research interests include Applied Trade Modeling, Foreign Investment, Technology Transfer and Development, Exchange Rate Economics and Exchange Rate Pass-through, Trade and Production Networks, Regional Trading Arrangements, and Market-access related issues under the WTO. Currently, he is engaged in a British High Commission, New Delhi funded policy research project on “State-level Exports, Competitiveness and Trade Promotion Policies: The Indian case study”. He has published in various national and international journals, monographs and also in edited volumes.

Venue: Room A0.23 (SBE - TS53)

Date: 07 October 2015

Time: 12:00  CET