Linkages between Technological Capability and Export Competitiveness: Evidence from Technical Efficiency of Indian Manufacturing Firms
Arora, Kashika
Linkages between Technological Capability and Export Competitiveness: Evidence from Technical Efficiency of Indian Manufacturing Firms - 2026.
50
This study examines firm-level determinants of technological capability in India’s Textile & Clothing and Electronics & Hardware sectors. Using a stochastic frontier production function (SFPF) to estimate technical efficiency (TE), it finds that in the low-technology textile sector, TE rises with embodied technology imports, while in the high-technology electronics sector, disembodied technology imports have a stronger impact. In electronics, foreign ownership, firm size, and age further enhance efficiency. The results reveal a strong complementarity between research and development (R&D) and export activity, with firms undertaking both achieving higher efficiency gains. Employing a dynamic panel approach, the paper explores whether efficient firms self-select into exporting or improve through learning-by-exporting. Overall, the findings highlight the mutual reinforcement between technological capability and export competitiveness in Indian manufacturing, underscoring the importance of innovation-driven strategies for sustained productivity and global integration. JEL Codes: C23, F14, L25, O30
Linkages between Technological Capability and Export Competitiveness: Evidence from Technical Efficiency of Indian Manufacturing Firms - 2026.
50
This study examines firm-level determinants of technological capability in India’s Textile & Clothing and Electronics & Hardware sectors. Using a stochastic frontier production function (SFPF) to estimate technical efficiency (TE), it finds that in the low-technology textile sector, TE rises with embodied technology imports, while in the high-technology electronics sector, disembodied technology imports have a stronger impact. In electronics, foreign ownership, firm size, and age further enhance efficiency. The results reveal a strong complementarity between research and development (R&D) and export activity, with firms undertaking both achieving higher efficiency gains. Employing a dynamic panel approach, the paper explores whether efficient firms self-select into exporting or improve through learning-by-exporting. Overall, the findings highlight the mutual reinforcement between technological capability and export competitiveness in Indian manufacturing, underscoring the importance of innovation-driven strategies for sustained productivity and global integration. JEL Codes: C23, F14, L25, O30
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