| Type | Journal article (empirical study) |
| Title | “Subnational Export Performance and Determinants: Evidence from Two Indian States” |
| Authors | Jaya Prakash Pradhan & M. Zohair |
| Published | 2016 · Review of Market Integration, 7(2), pp. 133–174 · SAGE Publications |
| Data | Manufacturing exports of Tamil Nadu & Uttar Pradesh · 2000–2008 |
| Read | DOI: 10.1177/0974929216653631 |
This is a plain-language summary of “Subnational Export Performance and Determinants: Evidence from Two Indian States” (Pradhan & Zohair, Review of Market Integration, 2016).
In short:
- Two large Indian states, very different export records: Tamil Nadu exported $24.8 billion in 2000–2008, against Uttar Pradesh’s $12.8 billion — and the intensity gap was wider still.
- The difference traces to four “spatial” advantages where Tamil Nadu leads — local demand, innovation, skills, and infrastructure — some of them by large margins (banking credit 7×, power 4×, patents 3×).
- Within each state, the firms that export tend to be larger, younger, more R&D-intensive, foreign-owned or business-group-affiliated — and helped along by fiscal incentives.
Two states, two outcomes
National export figures hide a lot. India’s states differ enormously in development, infrastructure, skills, and policy — so a country-level number can’t explain why one region thrives in global markets while another lags. This study, with M. Zohair, takes two deliberately contrasting states — Tamil Nadu and Uttar Pradesh — and asks what drives the gap between them.
Over 2000–2008, Tamil Nadu exported nearly twice what Uttar Pradesh did. And the intensity of exporting — exports relative to the size of the economy — tells an even sharper story: Tamil Nadu has run in double digits since 1997, while Uttar Pradesh stayed in single digits throughout.
Why the gap
The interesting question is why. The study points to four spatial advantages, and on each of them Tamil Nadu leads — often by a wide margin.
- Local markets. Tamil Nadu’s consumers are wealthier and its demand more diversified; Uttar Pradesh has a larger absolute market but a less sophisticated one. Demanding local customers, the study argues, prepare firms for global competition.
- Innovation. Tamil Nadu generated roughly three times the patent applications of Uttar Pradesh, with deeper technological specialisation and a stronger tilt toward high-tech manufacturing.
- Talent. Higher-education enrolment ran at 1,597 per 100,000 people in Tamil Nadu versus 1,155 in Uttar Pradesh — a better-skilled pool for export industries.
- Infrastructure. This is where the gaps are largest: Tamil Nadu led on power generation (4×), telecom density (2×), and banking credit (7×) — and, crucially, had ready port access.
Strikingly, the export gap (~2×) is smaller than several of the underlying input gaps (power 4×, banking 7×) — a reminder that exporting depends on the whole ecosystem working together, not any single advantage.
Who exports within a state
Spatial factors set the stage, but firms do the exporting — and not all firms are equally likely to. Within both states, exporters tend to be larger and younger companies, R&D-intensive ones, and those that are foreign-owned or affiliated to a domestic business group (the business-group effect being especially visible in Tamil Nadu). Fiscal incentives also moved the needle. In other words, the same firm-level traits that drive exporting nationally operate here too — but their payoff is amplified by a supportive regional environment.
Why it matters
The deeper contribution is methodological: by showing how two states diverge, the study makes the case that export analysis has to go below the national level. Spatial heterogeneity — in infrastructure, knowledge, skills, and sub-national policy — is not noise; it is much of the explanation. For policymakers, the lesson is that you cannot import another region’s success with a single measure. Tamil Nadu’s edge came from many things reinforcing one another, which argues for building the whole ecosystem: innovation systems, infrastructure, skilled workforces, industrial clusters, and export-friendly policy together.
Read the academic abstract
Traditionally, the export performance of economies has been analysed taking individual countries as the locational units — an approach unable to explain the subnational, regional, or spatial disparities within geographically vast countries like India, where enormous heterogeneity exists among states in economic development, infrastructure, skill, knowledge, and subnational policy. The analysis of two selected states, Uttar Pradesh and Tamil Nadu, indicates that their differential performance in manufacturing exports can be related to this contrasting heterogeneity in spatial factors. The findings also suggest that firms’ exporting in these two states is shaped by firm-level parameters such as firm age, firm size, R&D intensity, foreign ownership, domestic business-group affiliation, and a policy variable capturing fiscal incentives.Cite this article
Pradhan, J. P., & Zohair, M. (2016). Subnational export performance and determinants: Evidence from two Indian states. Review of Market Integration, 7(2), 133–174. https://doi.org/10.1177/0974929216653631
Related on this site
- The all-India version of this question — which states dominate exports: Made in India, Powered by Region: The Geography of India’s Export Success Story
- The same regional lens on small firms: Where Do India’s Small Businesses Thrive? The Geography of Entrepreneurship
- One of the “spatial advantages” examined on its own — innovation: Innovation Nation: The Hidden Geography of India’s Patent Revolution
