Outward FDI and Knowledge Flows: A Study of the Indian Automotive Sector

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Jaya Prakash Pradhan
Neelam Singh


In recent years developing countries have emerged as significant
participants in the OFDI (outward foreign direct investment), seeking strategic
assets. Such asset exploiting-cum-augmenting OFDI involves potential twoway cross-border knowledge flows. This study examines several dimensions
of OFDI in the Indian automotive industry – currently internationalizing
rapidly in terms of OFDI. This study undertakes a quantitative analysis of the
influence of OFDI activities on the in-house (domestic) R&D performance of
the Indian automotive firms during 1988-2008, and finds expected favourable
impact on the R&D intensity. The study concludes with suggestions to
promote OFDI, particularly the strategic asset enhancing OFDI.


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