Characteristics of Exporting and Non-Exporting Firms in Specific Industries in Gujarat: A Pilot Study

Abstract

Export is considered important for the economic growth of developing countries. There are several reasons for this. First of all, it provides much needed foreign exchange which can be utilised for the import of raw materials, machinery, capital goods and technology as also of certain essential commodities. Secondly, exports contribute to the resource allocation according to comparative advantage and also enable developing countries, particularly small ones, to overcome the limitations of their domestic market. For all these reasons, many of the developing countries have taken appropriate policy measures to boost exports in their respective countries and have attained the status of newly industrialising countries (NICs). India, inward looking till recently, has been undertaking macro-economic policy reforms vigorously since mid-1991. One of the chief objectives of these reforms is to promote exports of India goods. Although the efficacy of macroeconomic policy reforms in improving India's overall export performance is debatable (Nayyar 1993), there is no denying that unless certain measures at micro-level are taken for inducing non-exporting firms to increase substantially their share of exports in total sales, the government's aim of maintaining comfortable balance of payment position on a regular basis or for that matter becoming an export oriented economy cannot be achieved. This will require knowledge and understanding of the factors which make one type of firms exporters and the other type non-exporters, both operating under similar circumstances