Using a unique firm-level data set developed by combining NASSCOM and CMIE data, this paper analyses the innovative behaviour and performance of Indian ICTfirms against the backdrop of the history of Indian IT development over the past three decades, and the debates about the role of policy support versus the market mechanism, the domestic market versus exports, and the integration of hardware and software. Innovative behav iour is examined in terms of R&D intensity, foreign collaboration and the interface with academia. It is found that export orientation, if any, has a dampening effect on the innovative performance of firms.
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