FDI, technical efficiency and spillovers: Evidence from Indian automobile industry

Figures & data

Table 1. Private capital inflows to 30 emerging market economies

Items	1998	2007	2008	2010	2014
A. Total private capital inflows (B+C)	153,953 (100.0)	1,261,256 (100.0)	682,401 (100.0)	1,213,139 (100.0)	1,048,077 (100.0)
B. Total equity flows	156,648 (101.75)	574,313 (45.53)	452,794 (66.35)	668,262 (55.09)	687,187 (65.57)
B.1. FDI	141,115 (91.66)	490,750 (38.90)	535,367 (78.45)	521,227 (42.96)	585,971 (55.91)
B.2. FPI	15,533 (10.08)	83,563 (6.62)	−82573 (−12.10)	147,035 (12.12)	101,216 (9.66)
C. Total debt inflows	−2694 (−1.75)	686,943 (54.46)	229,607 (33.65)	544,877 (44.91)	360,891 (34.43)
C.1. Bank lending	−89175 (−57.92)	442,352 (35.07)	74,880 (10.97)	171,503 (14.14)	175,075 (16.70)
C.2. Non-bank lending	86,481 (56.17)	244,591 (19.39)	154,727 (22.67)	373,374 (30.78)	185,816 (17.73)

Notes: 1. All figure in billion US dollars; 2. Figures in parentheses denotes percentage of total.

Source: Adapted from Igan, Kutan, and Mirzae (2016).

Table 2. Productivity spillovers from FDI—Summary findings from empirical studies

Literature	Aggregation level	Results of spillover effects
Javorick (2004), Haddad and Harrison (1993), Suyanto and Salim (2013), Suyanto, Salim, and Bloch(2014)	Firm	Positive
Blomström (1986), Blomström and Wolff (1994), Caves (1974), Globerman (1979), Kokko (1996)	Industry
Aitken and Harrison (1999), Blomström and Sjöholm (1999), Djankov and Hoekman (2000)	Firm	Negative
Medda and Piga (2014), Rogers (2010)	Industry
Barrios and Strobl (2002), Flores, Fontoura, and Santos (2000), Girma, Greenaway, and Wakelin (2001)	Firm	Inconclusive

Source: Authors.

Table 3. Descriptive statistics

Variable	Sample	Mean	Maximum	Minimum	Standard deviation	No. of firms	No. of obs.
Output	Entire	4,110.28	164,478.51	24.02	11,970.57	67	938
	FF	5,925.03	164,478.51	94.38	15,301.98	15	210
	DF	3,617.07	137,940.1	24.02	10,901.83	52	728
Capital	Entire	936.38	50,169.4	2.35	2,910.16	67	938
	FF	1,251.06	35,542.41	20.3	3,321.52	15	210
	DF	847.84	50,169.4	2.35	2,804.41	52	728
Labor	Entire	167.86	7,618.34	2.85	434	67	938
	FF	241.96	3,863.41	8.2	467.64	15	210
	DF	146.43	7,618.34	2.85	425.62	52	728
Raw materials	Entire	2,320.87	95,189.85	10.63	7,078.25	67	938
	FF	3,174.6	95,189.85	18.34	9,081.95	15	210
	DF	2,100.29	68,450.36	10.63	6,443.95	52	728

Note: The above calculations are based on annual data of the sample firms for the period 2001–2014.

Table 4. Estimates of parameters of SFPF (Dependent variable: LNTI)

	Coefficients	Standard error	t-statistic
Constant	1.8806	0.0760	27.7341
LnNFA	0.1929*	0.0293	6.5839
LnRMC	0.3783*	0.0313	12.0851
LnSAL	0.4042*	0.3937	10.2677
R^2	0.8581
F-statistic	1,874.100*

* Significance at 1% level.

Table 5A. Descriptive statistics on technical efficiency of foreign and domestic firms

Description		Mean	Max	Min	Standard deviation	No. of firms
Aggregate (Entire Sample)	Entire	0.280	0.975	0.024	0.154	67
	FF	0.338	0.975	0.142	0.207	15
	DF	0.264	0.899	0.024	0.132	52
First Quartile (By Size)	Entire	0.229	0.975	0.099	0.201	17
	FF	0.560	0.975	0.141	0.227	2
	DF	0.185	0.460	0.099	0.200	15
Second Quartile (By Size)	Entire	0.250	0.899	0.063	0.172	17
	FF	0.229	0.249	0.211	0.010	4
	DF	0.256	0.899	0.063	0.172	13
Third Quartile (By Size)	Entire	0.235	0.670	0.024	0.143	17
	FF	0.237	0.364	0.160	0.073	4
	DF	0.234	0.670	0.024	0.142	13
Fourth Quartile (By Size)	Entire	0.416	0.757	0.271	0.137	16
	FF	0.414	0.757	0.274	0.137	5
	DF	0.417	0.687	0.271	0.110	11

Table 5B. Tobit regression estimates of efficiency of foreign vis-à-vis domestic firms

	Coefficients	Standard error	z-statistic
C	0.264359***	0.006648	39.7636
FOR_DUMMY	0.073216***	0.014051	5.210836
S.E. of regression	0.179738	Mean dependent var	0.280751
Log likelihood	280.7526	Sum squared resid	30.2058
Avg. log likelihood	0.29931	S.D. dependent var	0.182055

*** Significance at 1% level.

Table 6. Tobit regression estimates of determinants of technical efficiency

	Coefficients	Standard error	z-statistic
Constant	0.211418**	0.014187	14.90215
AGE_FIRM	−0.000832	0.000386	−2.158209
NS	0.00000518**	0.000000	16.46431
EXP_INT	0.014996	0.045325	0.330845
FD*AGE_FIRM	−0.003095**	0.000678	−4.563015
FD*NS	−0.000000875*	0.000000	−2.039696
FD*EXP_INT	0.763035**	0.067222	11.3509
FOR_DUMMY (FD)	0.108137**	0.026159	4.133893
S.E. of regression	0.120003	Mean dependent var	0.220366
Log likelihood	662.242800	Sum squared resid	13.378320
Avg. log likelihood	0.706016	S.D. dependent var	0.140243
Likelihood ratio test		Wald’s test
Test statistic	Value	Test statistic	Value
Likelihood ratio	245.8121**	F-statistic	117.1950**
		χ^2	703.1703**

* Significance at 5% level.

** Significance at 1% level.

Table 7. Tobit regression estimates of spillover effects

	Coefficients	Standard error	z-statistic
Constant	0.198098**	0.016647	11.89988
CEF_FD	3.289685*	2.065796	1.592454
DEF_FD	3.236731**	1.142881	2.832081
IEF_FD	−0.002692	0.002157	−1.247782
S.E. of regression	0.131886	Mean dependent var	0.220366
Log likelihood	43.24643	Sum squared resid	1.078429
Avg. log likelihood	0.645469	S.D. dependent var	0.141226
Likelihood ratio test		Wald’s test
Test statistic	Value	Test statistic	Value
Likelihood ratio	13.3326**	F-statistic	18.080790**
		χ^2	54.242360**

* Significance at 10% level.

** Significance at 1% level.

Table

Year	Entire sample	Foreign firm	Domestic firm
2001	0.2707	0.3274	0.2544
2002	0.2722	0.3290	0.2559
2003	0.2738	0.3305	0.2574
2004	0.2753	0.3321	0.2589
2005	0.2768	0.3336	0.2604
2006	0.2784	0.3352	0.2620
2007	0.2799	0.3367	0.2635
2008	0.2810	0.3383	0.2651
2009	0.2830	0.3398	0.2666
2010	0.2845	0.3414	0.2681
2011	0.2861	0.3430	0.2697
2012	0.2876	0.3446	0.2712
2013	0.2892	0.3461	0.2728
2014	0.2908	0.3477	0.2743

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