Economic Studies - Research Publications

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    DYNAMICS OF STRUCTURAL CHANGES IN INDIA’S EXPORTS, 1980-2016
    (Central University of Punjab, 2018) Fayaz, Mohd.; Bhatia, Sandeep Kaur
    The international trade flows have been dramatically expanding due to the growing integration of the world economies and have experienced spectacular changes over the past few decades. For that reason, the present study attempts to examine the dynamics of structural changes in India’s exports over the 1980-2016 period. Through the analysis of trends and patterns of India’s merchandise exports, the study finds that there is a declining share of primary products while the share of manufactured goods and petroleum products have increased. Further, the analysis of the direction of India’s exports reveals diversification especially towards South Asia, Southeast Asia, and Africa during the study period. The current study also extends analysis of Indian exports in terms of technological intensity over the 1980-2016 period. The results show that the exports of all said emerging economies have a large technological base owing to their significant investments in R&D and open-door policies. While the figures of Indian exports also show a steady though slow technological upgradation from low-tech to medium and high-tech exports but when compared to the standards of these emerging economies, are low. Further the study employs Revealed Comparative Advantage (RCA) and Constant Market Share (CMS) analysis for the ten exports destinations namely OECD, EU, USA, OPEC, UAE, Africa, Asia, East Asia, South and Southeast Asia, and West and Central Asia. Results of RCA shows that India has a comparative advantage in the exports of primary products in the markets of OECD, EU, USA, iv and OPEC. While in the markets of UAE, Africa, South & Southeast Asia, and West and Central Asia, India has a comparative advantage in the exports of both primary and manufactured products. The analysis further observes that the maximum number of commodities with a comparative advantage among all the export destinations are concentrated in UAE, Africa and Asia (except East Asia). While the results of the Market Effect (ME) and Market Adaptation Effect (MAE) shows that Indian exports to OECD, EU, OPEC, Africa, and West & Central Asia are comprised of the products for which the demand is relatively slow. However, in the markets of UAE, USA, East Asia and South & Southeast Asia, India is specializing in the products for which the demand is strong and can adapt their export structure to changes in the market composition of their imports. Also the analysis of the determinants of high technology intensive and low technology-intensive exports have been carried out by through Johansen Cointegration test and Vector Error Correction Model (VECM). For high technology exports, the present study finds a direct and significant long-run relationship with the world demand, FDI and R&D. For low technology-intensive exports, the study finds a positive and significant relationship of FDI and industrial value-added while world demand is found to be negatively related, however, is not significant. Thus in the view of above findings, the present study suggests that there is a need to devise policies that would make a favourable environment for attracting more FDI to build absorptive capability so that the movement towards the production of high technology intensive products and thereby exports could be facilitated. Further, the results show that India has reasonably diversified its exports in South and Southeast Asia and West and Central Asia with gaining importance in the exports of non-traditional and technological based items. However, there is an ample scope to diversify its exports in the market of East Asia into the sectors where international demand is high and swelling.
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    Whether FDI or Exports Enhance from Indian Manufacturing Firms
    (Euro American Association, 2017) Singh, Krishan; Kaur, Sandeep
    The economic reforms of 1991 resulted in an increased inflow of FDI into the Indian economy. However, for the invention of new techniques and skills, there is a great need to invest on R&D, requires a huge amount of capital, which can be available through FDI inflows. Technology has been imported in heavy amount after the implementation of liberalization policies. Therefore, the present study intends to know whether FDI contributes to the Indian manufacturing sector through R&D or not. The average growth of the manufacturing sector in India (7.93 per cent) has been found considerably higher during the second decade of reforms (2001-2012) as compared to first decade reforms (1991-2000). In the context of this, the present study has tried to examine the trends and patterns of FDI and R&D in manufacturing firms of India during the second decade of reforms (2001-12) and also, to analyze the impact of FDI and exports on R&D in manufacturing firms of India through fixed effect model. The results suggest that R&D has been significantly impacted by the import of capital goods, foreign equity, disembodied technology, and export intensity during the second decade of liberalization period. The present study suggests that greater approvals for foreign capital inflows are required in India, for enhancing the R&D in the manufacturing sector. There must be an appropriate coordination between public and private sector, which can improve the R&D expenditure of manufacturing firms of India.