Determinants of software exports during global economic slowdown

Abstract

Purpose – The aims of this paper are twofold. First, the trends and patterns in key variables of performance of sample software companies during the study period are overviewed. Second, the determinants of information technology (IT) export across the sample companies during the period of economic slowdown have been analyzed. Design/methodology/approach – Secondary data have been used in the study. Regression analysis is concerned with the study of the dependence of one variable, the dependent variable, on one or more other variables, the explanatory variables, with a view to estimating and/or predicting the mean or average value of the former in terms of the known or fixed values of the latter. The data collected through survey were scrutinized, and statistical software were used for analysis. The variables documented in the study include the exports, capacity utilization, profits, exchange rate and dummy for recession, dummy for countries of export. Findings – The Indian IT sector was set for smaller growth due to global economic slowdown. Large IT service players were able to some extent cope with tighter client spends, but it was smaller IT companies which were facing the severe heat. Production of sample companies decreased at an average of 34 per cent in 2008. The profits of the sample companies have decreased by 34.34 and 78.67 per cent, respectively, during 2008. In case of determinants of software exports, it is observed that capacity utilization is positively related to exports. The estimated mean of exports increases by about 1.370. Originality/value – This paper focuses on originality in the sphere of scientific work. Secondary data have been used in the study. The data were collected from the Annual Reports of four randomly selected software companies. Both face-to-face interview and on-line survey based on a structured questionnaire to the sample companies were used to collect the data. All the work has been done in original by the authors and the work used has been acknowledged properly.