As part of the Economic Lecture Series at IIM Indore, Professor Aradhna Aggarwal, Copenhagen Business School delivered a talk on January 19, 2017.
She spoke on the topic ‘The Impact of Foreign Ownership on R&D Intensity and Technology Acquisitions in Indian Industries: Analysis of Pre and Post Global Crisis’. The insightful talk revolved around the speaker’s research paper that analysed whether foreign firms performed better than their domestic counterparts in India, with an emphasis on technology.
During the talk, Professor Aggarwal raised the issue of the role of active R&D FDI in the Indian scenario and its impact on the domestic firms. Recent trends seem to indicate that India has adopted an FDI-induced growth strategy. Professor Aggarwal explained that various theories such as OLI, resource based theory, network and institutional approaches can be used to develop hypothesis. This was illustrated by comparing a firm’s subsidiary and the firm itself to a baby and parent respectively, and this helped the audience understand the essence of the hypotheses.
She also explained the methodology of the research process, which involved categorizing firms based on equity holding, followed by their sectoral distribution using cluster analysis. The next step was to identify differences between technological intensity of domestic and foreign owned firms. The last step was robustness check.
The research findings, prior to and after the Global Crisis, were summarized and it indicated that there was little evidence of R&D relocation to India. It also highlighted that local R&D efforts were not different from foreign counterparts in the Indian scenario.
Professor Aggarwal stated that in today’s context, as a nation, it is of paramount importance to strengthen one’s own R&D capabilities and stressed the need to bolster intellectual property rights.
The talk was concluded with a Q&A session.