Research Team: T. N. Srinivasan & Vani Archana
Commencement: July 2007
Completion: June 2009
Funded by: Yale University, USA
The study has been carried out in two phases. The first phase of the project, which used secondary data, examined the impact of preferential and regional trade agreements (PTA/RTAs) on India’s trade flows. It found that, in terms of bilateral trade flows, the overall effects of PTAs and RTAs are largely deleterious for India. In the second part of the paper, firm-level data was examined to identify the factors that influence the decision of Indian firms to participate in export markets. It showed that several different characteristics of firms (such as their size, productivity, profitability, etc.) are relevant, besides country level barriers, in the firms’ decision to export.
In Phase II, a specially conducted firm-based field survey collected primary data from a sample of 400 firms in selected industry segments at different locations in the country. Besides exploring factors that could influence export capabilities of firms in a wide spectrum of manufacturing industry in India, the survey addresses a range of issues that affect the export performance of Indian firms. The study has identified several firm-level characteristics and environmental constraints that could affect the firms’ total factor productivity. Institutional bottlenecks like uncertainty of regulatory policies, political instability, customs and trade regulations are also found to affect firms’ productivity and export behaviour. The findings of the study were presented at the Workshop on International Trade (Economic Growth Centre) in Yale University.