Subnational Export Performance and Determinants

Abstract

Traditionally, the export performance of the economies was analysed taking individual countries as the locational units, which were not able to explain the subnational, regional or spatial disparities within the geographically vast countries like India, because a huge amount of heterogeneity exists among different states in terms of economic development, infrastructure, skill, knowledge and subnational policies. The analysis of the two selected states, namely Uttar Pradesh and Tamil Nadu, indicates that their differential performance in manufacturing exports can be related to their contrasting heterogeneity in terms of above spatial factors. Findings also suggest that firms’ exporting in these two states are shaped by a number of firm-level parameters such as firm age, firm size, research and development (R&D) intensity, foreign ownership, domestic business group affiliation and the policy variable capturing fiscal incentives.

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