Liberalisation and Technological Accumulation Strategy in Industries from Developing Economies: An Analysis of Indian Capital Goods Manufacturing Firms

Technological accumulation is a complex process of correct mix of indigenous and/or imported technology, mainly for the firms belonging to developing economies after opening their economies. To understand these issues, the case of Indian capital goods industry is taken for the years 1994–1995 to 2015–2016. It was found that only 39% of the firms belonging to Indian capital goods sector are technologically active, that is, resorting to either embodied or disembodied technology acquisition. Multinomial logit model is estimated to find the impact of various variables in determining the strategy of technology accumulation. The factors such as age, size, technology spillovers and outward foreign direct investment were found to have a positive impact on the firms to resort to ‘indigenous R&D only’ as a strategy of technology accumulation. While ‘disembodied technology import only’ is influenced by factors like embodied and disembodied technology imports. However, strategy ‘both indigenous R&D and disembodied technology import’ is found to be influenced by foreign equity participation, mergers and acquisitions.