TECHNOLOGY ACQUISITION, DE-REGULATION AND COMPETITIVENESS - A STUDY OF INDIAN AUTOMOBILE-INDUSTRY

This paper has attempted to analyse the effects of de-regulation polic y, introduced in India during the mid 1980s, on technology acquisition and competitiveness [defined in terms of market share changes] in the Indian automobile industry during the 1980s. Following evolutionary t heoretical framework, the paper argues that asymmetry among firms in t erms of technology acquisition [through technology imports and in-hous e efforts] explain much of the firm level differences in competitivene ss. Asymmetry in technology acquisition is largely due to differences in the firms' ability to bring about technological paradigm and trajec tory shifts. The results of the econometric exercise support the view that, even in an era of capacity licensing, development of competitive skills crucially depended upon the ability to build specific technolo gy trajectory advantages. This is achieved by successfully complementi ng imported technology with in-house technological efforts. Competitiv eness in a de-regulated regime would, however, depend upon the ability of the firm to bring about technological paradigm shifts. New firms w ho depended on intra-firm transfer of technology and firms with in-hou se R & D efforts, to accomplish paradigm shifts, appear more successfu l. Further, in a liberal regime, advantages of vertical integration ov er sub-contracting also appear to be important in the determination of competitiveness. (C) 1998 Elsevier Science B.V. All rights reserved.