Outward FDI, Exports and Technological Efforts: A Study of Indian Manufacturing Firms

In this study the hypotheses that the choice between OFDI and export decision of the firms depends on the firm level productivity is tested. Here, the productivity levels of OFDI firms vis a vis exporting (as an alternate mode of internationalization of firms) and the domestic firms are compared. The study employs firm level data obtained from Centre for Monitoring Indian Economy (CMIE) for the period from 1990-2009 for analysis. Two-sided and one-sided KolmogorovSmirnov stochastic dominance test is employed to compare productivity distribution of OFDI vs. exporting/domestic firms. The productivity distribution of firms which undertake OFDI stochastically dominates firms which exports for the period from 2004-2009 (later period of liberalization). [FGKS Research Paper].