do technology spillovers accelerate performance of firms? unravelling a puzzle from indian manufacturing industry

Abstract

This paper explores the relationship between technology spillovers and productivity for a sample of Indian manufacturing firms over the period 2001-2012. Technology spillovers are defined as function of technology adoption (R&D and technical know-how) and technology diffusion (imports and exports). The paper considers two measures of productivity, namely total factor productivity (TFP) and labor productivity for analysis. For TFP, Results show that firms that are engaged in technology adoption found to be more productive than other. For labor productivity, results demonstrate that firms that are engaged in technology adoption and technology diffusion through imports appear to be more productive than others. This validates the fact that Indian manufacturing firms represent learning-by-importing phenomenon due to their general labor-intensive production processes. The results represent a weak link between technology diffusion through exports and TFP, however strong links are established among labor productivity, technology diffusion through imports & R&D.