Datasets and Codes for "FDI Spillovers, Innovation and the Role of Industrial Clusters: Evidence from Innovative Indian Manufacturing Firms"

In this study, to analyse the role of horizontal and vertical FDI spillover upon innovation output, measured through patent application and patent granted across firms in a prominent industrial cluster and firms located outside the industrial cluster, we have taken data of Indian innovative manufacturing firms during the period 2007 to 2020. India’s full-fledged implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) started in 2005. However, one of the key variables of the study (the Input-Output Table for India, required to calculate the vertical FDI spillover variable) is available only from 2007. Our initial dataset comprises 10,316 firms across 23 broader two-digit manufacturing industries. These data are further complemented with PatSeer (Patent Search and Analysis Software) data for patent information. The firm-level data are collected from the CMIE Prowess database. Following Hall et al. (2013) and Igna and Venturini (2023), we dropped the firms without a single patent to their credit during our entire study period from the sample. This decision is consistent with the literature as it ensures that all firms face a decision on how to protect their innovation. This process left us with 347 innovative firms, constituting the final sample for the empirical analysis.