Mergers, Acquisitions and Export Competitiveness: Experience of Indian Manufacturing Sector

Abstract

Abstract In the context of economic reforms in general and subsequent wave of M&A in particular, this paper attempts to examine the impact of M&A on the export competitiveness of firms in the Indian manufacturing sector. By using a panel dataset of 33 industries from the period of 2000-01 to 2007-08, it is found that, the wave of M&A has enhanced the export competitiveness of firms. The industries with larger number of M&A have greater penetration in the international market. The other factors that have significantly contributed to export competitiveness include the presence of MNCs and import of foreign technology. Export competiveness is higher in the industries that have larger presence of MNCs and greater foreign technology purchase intensity. On the other hand, industries with higher capital intensity or greater selling efforts by firms have limited penetration in the international market. However, this paper did not find any significant influence of market concentration, competition from imports, in-house efforts, or profitability on export competitiveness of firms. Therefore, the findings from this paper have important policy implications in relation to the regulation of M&A and entry of MNCs as well as the import of capital goods. [PUBLICATION ABSTRACT]