Size, Age & Firm Growth : The Computer Industry in India

In this paper we have analyzed the growth trends in the Indian Computer Industry for the period 1991-2002. We have looked espacially at significance of size and age on firm's growth - whether the law of diminishing returns to learning} holds for a high tech industry like computer or not. The striking difference between computer software and hardware industry has also been taken into account: Software is more of a service oriented industry mainly targeting exports whereas hardware is a goods oriented industry, targeting home market. Hence we have analysed hardware and software industry seprately. We find that the law of diminishing returns to learning doesn't hold for software industry but does hold for hardware industry. Current size negatively affects firm growth. More diversified hardware firms are more sucessful in the Indian scenario