Exporting,R&D investment and firm survival in the Indian IT sector |
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| Affiliation: | 1. Department of Economics, Business, Mathematics and Statistics, University of Trieste, Trieste, Italy;2. Department of Economics, University of Graz, Graz, Austria;3. Department of Economics and Statistics, University of Salerno, Fisciano (SA), Italy;4. Department of Political and Social Sciences, University of Trieste, Trieste, Italy;1. Department of Economics, The Pennsylvania State University, University Park, PA 16802, USA;2. Department of Economics, National Tsing Hua University, Hsinchu 30013 Taiwan |
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| Abstract: | This paper examines the effect of exporting and R&D investment on firm survival for a panel of Indian IT firms. We show that exporting has competing effects on firm survival. On the one hand, exporting and investing in productivity are complementary activities, while, on the other, exporting activity is an additional source of uncertainty for the firm. We show that both effects influence survival, but operate at different points in time. Specifically, the hazard facing exporters is higher than non-exporters in the initial phase following entry into the export market, reflecting the fact that exporters are particularly vulnerable to shocks in the start-up phase. However, over time, exporters benefit more from productivity gains than non-exporters and the hazard facing exporters falls below that confronting non-exporters. |
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| Keywords: | India Firm survival Information technology R&D Exports |
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