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A Firm Level Study on Determinants of Spillover Effects of Foreign Direct Investment in the Manufacturing Industry in India.


Affiliations
1 University School of Management and Entrepreneurship, Delhi Technological University, Delhi, India
2 Department of Business Economics, South Campus, University of Delhi, Delhi, India
3 Department of Commerce, Hansraj College, University of Delhi, Delhi, India
     

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This paper aims to study whether foreign and domestic firms can be distinguished from each other on the basis of their behavior in terms of the factors that are considered to be the determinants of spillover effects from foreign firms to domestic firms. For this purpose logistic regression is used at firm level. The results show that this model could very well explain the behavior of the foreign firms’ vis-à-vis domestic firms. Firms with higher export intensity, import intensity, R&D intensity, technical fees intensity are foreign firms. It is observed that as the predictor variables are added one by one to the model the results improve at every step which shows that these predictor variables explain the group membership to foreign or domestic category very well. On the basis of analysis of five test criteria, five models and individual exponential beta coefficients, it is fairly evident that foreign firms behave differently from domestic firms in terms of spillover effects.

Keywords

FDI, Determinats of Spillover Effects, Indian Manufacturing Industry.
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  • A Firm Level Study on Determinants of Spillover Effects of Foreign Direct Investment in the Manufacturing Industry in India.

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Authors

K. V. Bhanu Murthy
University School of Management and Entrepreneurship, Delhi Technological University, Delhi, India
Deepa Saran
Department of Business Economics, South Campus, University of Delhi, Delhi, India
Meghna Malhotra
Department of Commerce, Hansraj College, University of Delhi, Delhi, India

Abstract


This paper aims to study whether foreign and domestic firms can be distinguished from each other on the basis of their behavior in terms of the factors that are considered to be the determinants of spillover effects from foreign firms to domestic firms. For this purpose logistic regression is used at firm level. The results show that this model could very well explain the behavior of the foreign firms’ vis-à-vis domestic firms. Firms with higher export intensity, import intensity, R&D intensity, technical fees intensity are foreign firms. It is observed that as the predictor variables are added one by one to the model the results improve at every step which shows that these predictor variables explain the group membership to foreign or domestic category very well. On the basis of analysis of five test criteria, five models and individual exponential beta coefficients, it is fairly evident that foreign firms behave differently from domestic firms in terms of spillover effects.

Keywords


FDI, Determinats of Spillover Effects, Indian Manufacturing Industry.

References





DOI: https://doi.org/10.17492/focus.v6i1.182691