Do Firm’s Activities Affect the Export Behavior in India’s Food Processing Industry?

This paper examines the effects of cost efficiency and R&D factors with the firms’ types on export behavior in India’s food processing industry using Prowess data during 1998-2018. We apply the logistic model for the determinants of export participation and the fixed effects model for the export amount. Cost efficiency and R&D investment generally make positive impacts on export activities. In particular, firms having export experience tend to be favorable to the activities, and the affiliated types bring different effects according to business characteristics. It indicates the necessity to consider the elements of the individual firm, focusing on existing exporters to improve the export activity. Therefore, these results suggest implications for expanding total exports of the Indian food processing industry, showing that efficiency innovation and R&D make it possible to improve the firm’s capacity for export promotion.