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How firms learn from capability spillovers in vertical linkages - 2 February 2023

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Online seminar on heterogeneity in capabilities of firms hosted by King's College London and the Indian Institute of Management (Bangalore).


This seminar is part of a wider series of lectures conducted by Kings’s College India and the Indian Institute of Managament (Bangalore) under the aegis of the project - Enablers and Obstacles for UK-India Trade: Banks and Diasporas. The three-year project, funded by UK Economic and Social Research Council (ESRC) and Indian Council of Social Science Research (ICSSR) is led by Dr Sunil Mitra Kumar and Dr Kamini Gupta in collaboration with Dr Prateek Raj. It has been co-designed with non-academic partner the Federation of Indian Chambers of Commerce and Industry (FICCI).

In this seminar Dr. Prateek Raj (Asst. Prof. at IIM-B) discusses a puzzle about heterogeneity in firm capabilities - Classical microeconomic theory suggests that heterogeneity in capabilities between firms should decrease over time due to the exit of less capable firms. However, emerging economies are characterized by the presence of many less capable firms along with a select few high-capability firms.

In a new paper, Raj with his co-authors Gaurav GB and Sai Yayavaram from IIMB argue that one source of this persistence in heterogeneity is the variation in capability spillovers received by firms through their vertical linkages. Using data on Indian firms and their industry linkages, they find that capability spillovers from vertical linkages are significant and heterogeneous, providing a rationale for the presence of firm-level heterogeneity in capabilities.

About the Speaker

Prateek Raj researches how free and inclusive societies evolve(d) in history, and the role media technologies play(ed) in it. Prateek is an Assistant Professor in Strategy at the Indian Institute of Management Bangalore (IIMB). Prateek earned his doctorate from University College London (UCL) in 2018.

Photo credit: Prateek Raj

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