Randomized trial assesses indirect technology transfers from FDI to local firms in India's manufacturing sector, indicating potential growth opportunities.
This paper analyses the technology transfers to local from foreign direct investment (FDI) in India. It examines both the direct and indirect transfer of technology from FDI to local firms. An analysis of firm-level panel data from India’s manufacturing industries for a long period of eighteen years spanning from 2000-2001 to 2017-2018 employing the firm-level fixed effect estimator reveals only indirect technology transfers to local firms from FDI. It does not reveal any direct technology transfers from FDI to local firms. Even after controlling for the technological differences across industries the analysis does not show the direct technology transfers from FDI to local firms; nevertheless, it underscores the indirect technology transfers from FDI to local firms in low-tech industries, not to the local firms in high-tech industries.
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Sanjaya Kumar Malik (2026) studied this question.
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