GEP 19/06: Technological catch-up to the national and regional frontier: Firm-level evidence for India

Abstract

This paper studies productivity convergence to the regional and national frontiers among manufacturing firms in India, using panel data over the period 1999 to 2010. We find evidence of convergence by lagging firms to both their national and regional frontiers, with faster convergence to the national frontier than to their regional frontier. We examine the effects of export behaviour on this process of convergence, and the results demonstrate that exporting promotes productivity growth but slows down the convergence process since export firms tend to be nearer to frontiers. We also investigate the effect of outward FDI (OFDI) on firms’ productivity growth and convergence. Likewise, the results show that OFDI facilitates firms’ productivity growth but decelerates the speed of convergence.

Download the paper in PDF format

Authors  

Shubin Yang, Sandra Lancheros and Chris Milner 

View all GEP discussion papers | View all School of Economics featured discussion papers