Does Investing in Technology Affect Exports? Evidence from Indian Firms

Abstract

The authors use firm‐level data from Indian manufacturing industries to explore the determinants of exports, focusing on the role played by technology. The empirical analysis, which distinguishes between a firm's decision to export and the volume of its exports conditional on its having decided to export, reveals that investments in technology via R&D and technology transfer agreements can facilitate the entry of Indian firms into export markets. However, their influence on the volume of exports is fairly limited. Factors with a more broad‐based influence on both export participation and volumes include labor intensity and, especially, firm size.

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