Modes of Technology Accumulation, Total Factor Productivity and Indian Manufacturing Sector: Firm-Level Analysis

Abstract

Accumulation of technology has largely been acknowledged as an important factor determining productivity of the manufacturing firms. However, there are different domestic and foreign means of technology spillover that lead to its accumulation leading industry specific technological complexity. In the past, researchers have examined the process of technology accumulated through various channels and also their impact on productivity of the manufacturing sector. Nevertheless, there is a dearth of literature for a detailed industry specific analysis in this direction. In an attempt to fill this gap, the present study provides a detailed micro level analysis regarding the impact of various channels of technology accumulation on productivity of the manufacturing firms especially taking into consideration their technology intensity. It was found that at the aggregate level, the impact of stock of embodied and disembodied imported technology is positive on productivity of the manufacturing firms whereas the impact of domestic technology is found to be negative and significant. However, results at the disaggregated level depict inter sectoral variation regarding the impact of various channels of technology accumulation on the productivity of the different manufacturing firms.