India’s Foreign Trade Dynamics in the Era of Globalization: Trends and Policy Analysis

Dr. Anchal Yadav

doi:10.71097/IJAIDR.v11.i2.1844

India’s Foreign Trade Dynamics in the Era of Globalization: Trends and Policy Analysis

Author(s)	Dr. Anchal Yadav
Country	India
Abstract	The purpose of this paper is to examine the relationship between digital intensity and productivity at the firm level, emphasizing non-linearity, heterogeneity at the firm level, and organizational complementary capabilities. In spite of an increasing recognition regarding the power of digital technology, as a general-purpose technology that will transform production, coordination, and innovation, in all sectors, current studies have concentrated solely on aggregate findings. This implies that no evidence is available on how or whether digitalization affects productivity at the firm level. Therefore, it is imperative to address these shortcomings in the current study by assessing whether digital intensity raises TFP, if threshold effects exist, and how constraints in terms of organizational and human resources affect the gains of digitalization. A comprehensive theoretical framework incorporating the Resource-Based View theory, complementarity hypothesis, and learning-by-doing view underlies this investigation. Panel data analysis at the firm level will be carried out to account for temporal changes in digitalization, and Total Factor Productivity will be computed using the Olley-Pakes and Levinsohn-Petrin methods to address simultaneity and endogeneity issues in estimating the production function. It can be concluded that there is a positive link between the two variables, and yet it cannot be regarded as a linear one. There is some evidence to suggest that this association follows a U-shaped pattern, meaning that low digital use may actually produce either weak or negative returns in the short term, at least partly due to the fact that firms use digital technologies with a certain cost of adjustment, while productivity gains will become noticeable only after firms reach the stage of commitment regarding technology and organization. The research findings clearly reveal considerable differences among firms and industries. In particular, large firms and those that operate in high-tech industries tend to benefit more reliably from digitalization compared to SMEs and traditional manufacturers. In addition, firms that acquire complementary skills along with digital technologies, including R&D and training, experience much greater gains in productivity and effectiveness, confirming that technology alone does not guarantee productivity gains. The paper contributes to the existing literature through empirical analysis that provides evidence regarding the impact of digitalization on productivity at the firm level. It highlights the significance of taking into account the intensity of the use of digital technology, the organization’s readiness for change, and capabilities development. The conclusions suggest that it is time for firms and governments to stop focusing only on technological innovation but rather facilitate digital transformation through process innovation and human resource development.
Keywords	Digital intensity, total factor productivity, firm-level analysis, organizational capital, human capital, digital transformation.
Published In	Volume 11, Issue 2, July-December 2020
Published On	2020-10-08
Cite This	India’s Foreign Trade Dynamics in the Era of Globalization: Trends and Policy Analysis - Dr. Anchal Yadav - IJAIDR Volume 11, Issue 2, July-December 2020. DOI 10.71097/IJAIDR.v11.i2.1844
DOI	https://doi.org/10.71097/IJAIDR.v11.i2.1844
Short DOI	https://doi.org/hbxcxn

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India’s Foreign Trade Dynamics in the Era of Globalization: Trends and Policy Analysis

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