Why do Indian firms go abroad?

Overseas investments by the emerging economies are a feature of globalisation. Investments by Indian firms, though not large in volume, differ from that of other emerging economies such as China in their composition, destination and modality of investments. A relatively high proportion of their investments are in the manufacturing and services sectors of the developed economies such as the UK and the USA. A number of statistical studies have attempted to identify the factors motivating Indian firms to invest abroad. Most of these studies attempt to ground the analysis in the received theory of foreign direct investment centred on the ownership advantages, location and internalisation (OLI) paradigm. This paper argues that statistical tests cannot fully account for the unique nature of India’s investments abroad. The pattern of investments that differs from that of the other emerging economies is to be attributed to India’s endowments of entrepreneurial skills centring on exploration of investment opportunities and astute management of complex organisations. These endowments are an inheritance from history augmented by the contribution of India’s diaspora abroad. The lukewarm investment climate at home may also be a factor in the decision of Indian firms in technology and skill intensive firms to venture abroad. Explanations for the unique nature of overseas direct investments by Indian firms have to be sought in the organisational structure and history of Indian business houses

Symposium on globalisation

The Alumni Association of the Lancaster University Management School organised a mini symposium on globalisation, in New Delhi on January 17th 2004. The symposium was based on a collection of essays titled " Making Globalisation Good" edited by John Dunning (Oxford University Press, 2003: Paperback Edition 2004). The theme of the book- moral challenges posed by globalisation, is addressed by a constellation of academics, politicians, business leaders and religious leaders. The contributors to the volume include the Nobel Laureate Joseph Stiglitz, Dame Shirley Williams, Chief Rabbi Jonathan Sacks, Khurshid Ahmad of the Islamic Foundation and Gordon Brown. John Dunning's incisive essay on the moral imperatives of global capitalism sets the stage for the varied and extensive discussion of the main theme of the book. The New Delhi Symposium with commentaries on the book by three of India's eminent commentators and analysts of issues of globalisation provides an Indian perspective on the issues discussed in John Dunning's book. This discussion paper presents an edited version of the introductory remarks by John Dunning and comments by N.K. Singh, Professor Narasimha and Ashok Desai.