Abstract
The study is an attempt to examine the determinants and impact of export propensity and export intensity for firm-level performance in India. The factors determining export propensity are political stability, corruption, and competition from the informal sector while the determinants of export intensity in the present study are identified as a skill of the labour force, the technological capability of a firm, and foreign ownership of technology in a firm in India. A two-stage Heckman selection model has been advanced to investigate the linkage between the export performance of Indian firms with the home institutional environment and firm competencies. Firm-level data of approximately 8,000 Indian firms are used as available from the World Bank’s Enterprise Surveys (WBES) database. The results indicate that political stability and competition effect export propensity of Indian firms while export intensity is impacted by access to technology and employing skilled labour. The study has important theoretical implications in terms of understanding the exporting behaviour of firms. It indicates that the decision of firms to export and their export performance are interlinked. It is affirmed that export intensity is dependent on firm-specific competencies while institutions indirectly influence the decision of firms to export. The policy measures of Skill India and Make in India strongly favour increased access to the skilled labour force and strengthening the domestic industry which may lead to an increase in the export intensity of Indian firms. The recent institutional measures adopted favour a stable environment of doing business as well as providing firms opportunities to focus and leverage their competencies in the best possible manner. The current nascent steps of policy reforms need to be aggressively implemented for enhanced export capabilities of Indian firms
Highlights
An increasing number of firms and new ventures expand their businesses to international markets in the form of exports, especially in the emerging economies
The results indicate that political stability and competition effect export propensity of Indian firms while export intensity is impacted by access to technology and employing skilled labour
This study explores the impact of issues related to political stability, corruption, degree of competition from informal sectors, the skill of the labour force, foreign ownership of technology in a firm and access to technology on export performance of the firms in India
Summary
An increasing number of firms and new ventures expand their businesses to international markets in the form of exports, especially in the emerging economies. Play an important role in determining the export performance of the firms (Krammer, Strange, & Lashitew, 2018). Export intensity may be defined as the ratio of the sales of exports to total sales (Calof, 1994; Salomon & Shaver, 2005). It is broadly studied as an outcome of the performance of exporting firms (Wang & Ma, 2018)
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