Export Network and Employment Generation Capacity: A Study of India’s Micro, Small and Medium Enterprises

Abstract

This paper analyses the influence of the export networks of Micro, Small, and Medium enterprises on their capacity to generate employment in India. The export networks are heterogeneous in terms of direct, indirect, and both direct and indirect channels of exporters. The study measured the capacity of employment generation in terms of labour intensity. The labour intensity of nonexporting units is higher than all channels of exporters. The econometric analysis also coincides with this result. However, within the exporting sector, the labour-intensity of direct exporters is higher compared to indirect exporters and those using both channels. In certain industries, the labour-intensity of indirect exporters is higher than that of direct channel exporters. This reflects that ignoring the heterogeneity among the exporters could result in an underappreciation of the significant role that direct exporters play in generating employment.