Institutional Dynamics And The Evolution Of The Indian Economy

Institutional Dynamics and the Evolution of the Indian Economy Institutional Dynamics and the Evolution of the Indian Economy Edited by Rajesh Kumar and Murali Patibandla INSTITUTIONAL DYNAMICS AND THE EVOLUTION OF THE INDIAN ECONOMY Copyright © A. Desai, R. Dossani, M.W. Hansen, R. Kumar, R. Lema, A. Okada, M. Patibandla, J.D. Pedersen, A. Roland, and A. Sanyal, 2009. Softcover reprint of the hardcover 1st edition 2009 All rights reserved. First published in 2009 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-37554-7 ISBN 978-0-230-62013-1 (eBook) DOI 10.1007/978-0-230-62013-1 Library of Congress Cataloging-in-Publication Data Institutional dynamics and the evolution of the Indian economy / edited by Rajesh Kumar and Murali Patibandla. p. cm. Includes bibliographical references. ISBN 978-0-230-60852-8 1. India—Economic policy—1991– 2. Economic development—India. 3. Globalization—Economic aspects—India. 4. International business enterprises—India. 5. Investments, East Indian. I. Kumar, Rajesh, 1954– II. Patibandla, Murali. HC435.3.1628 2009 330.954—dc22 2008035832 A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: April 2009 10 9 8 7 6 5 4 3 2 1 Contents List of Figures vii List of Tables ix Preface xi List of Contributors 1. Managing Globalization: India and China Compared Jørgen Dige Pedersen 2. The Rise of Indian Multinationals: Explaining Outward Foreign Direct Investment from India xvii 1 31 Michael W. Hansen 3. Global Value Chains, Market Organization, and Structural Transformation of Bangalore’s Software Cluster in the 1990s and Beyond 63 Rasmus Lema 4. Institutional Change and Industrial Development: The Experience of the Indian Automobile Industry 83 Aya Okada 5. Corruption: Market Reform and Technology 119 Murali Patibandla and Amal Sanyal 6. Accessing Early-Stage Risk Capital in India 135 Rafiq Dossani and Asawari Desai 7. Understanding Indians in a Global Era 157 Alan Roland 8. Negotiating in India: Does Brahmanical Idealism Play a Constraining or a Facilitative Role? 171 Rajesh Kumar Index 189 Figures 1.1 1.2 1.3 1.4 1.5 1.6 2.1 2.2 2.3 2.4 2.5 2.6 4.1 6.1 6.2 India’s export to major destinations, 1980/1981 to 2006/2007 India’s import from major suppliers, 1980/1981 to 2006/2007 Gross Domestic Product. Annual growth rates, 1986–1987 to 2006–2007 Export of selected products and services, 1988/1989 to 2005/2006 Corporate profitability in India, 1987/1988 to 2005/2006 India’s and China’s different strategies to reach rconomic prosperity Outward FDI (OFDI) from India 1980–2006 Number of bilateral investment treaties between India and other countries, cumulative Indian M&As abroad Sector composition of Indian OFDI Country orientation of Indian OFDI Positioning theories in the investment development path Passenger car production by manufacturers Investors’ industry preferences The operating environment 7 8 9 13 15 24 34 35 37 38 39 48 91 144 146 Tables 1.1 2.1 4.