Can governance enhance international competitiveness?

What is it about?

International competitiveness is gaining importance in India, as competition intensifies in the face of months of shrinking exports. This may lead to a major discontinuity such as faced in 1991, which sparked the concept of competitiveness for Indian industries. Owing to its ever-growing importance, building national competitiveness is the theme for the Confederation of Indian Industries (CII) in the year 2016-17. They further reiterated competitiveness as the chief goal for the nation. Knowledge-based industries can help India shift from commodity heavy export basket towards achieving better balances. While we appreciate the important role of management of innovation, technology, and IP for international competitiveness in industries, reasons for sluggish progress for firms of Indian origin is still a mystery. Our study tries to unleash this unknown by understanding the linkages between Corporate Governance and International Competitiveness and bring about some food for thought in this direction. The linkages are examined using a novel dataset that contain both listed and unlisted, Business Group affiliated as well as unaffiliated firms. Role of smaller board size for dynamic situations of International Competitiveness is an interesting finding. This categorically points to the quality aspects in board, including international capabilities to compete internationally – which are an important dimension of strategies for growth for the country with the largest youth population.

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Why is it important?

The study is a novel attempt to establish the relationship between flexibility in Corporate Governance and International Competitiveness.

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