Empirical Evidence on Hold-Up in India: An Analysis of ICT Sector

Abstract

The present paper seeks to analyze whether hold-up as a phenomenon exists in the IndianICT sector. An analysis with respect to the empirical evidence pertaining to presence of hold-up in the Indian ICT sector on the basis of certain factors which have been elucidated in a lotof scholarly works .It was found that there is a clear absence of hold-up in the Indian ICTsector. On an analysis of all the factors through empirical data, it was found that there is apresence of Indian manufacturers at around the years 2012-16, although they had perished interms of lower sales in the face of stiff competition from foreign manufacturers. If therewould be presence of hold-up, then one of the factors which would have shown-up wouldhave been lesser number of players entering the Indian ICT market. Statistics have shownthat till the year 2019 there were a considerable number of manufacturers entering the IndianICT sector (mobile manufacturing sector).These manufacturers have also brought along withthem a considerable range of newer products which have appealed the domestic consumers inIndia. This shows that the phenomenon of patent hold-up is absent in Indian ICT sector. Thestatistics show that from the year 2012-2019 onwards there has also been large increase in thesales of mobile phones which negatives the presence of hold-up. The data showcases that theall the major holders of the patents are non-Indian companies in the Indian ICT sector.  Further thedata also shows that the average cost of mobile phones have been constant for a considerableperiod of time. This shows that despite large number of foreign companies having asubstantial number of patents, the average cost of handsets have not risen. Thus, the impact ofholdup as a phenomenon has not shown up in the Indian ICT sector.It was also found that domestic companies in India have negligible R&D investments whichcan be said to cause low or negligible patent portfolios which lead to poor indigenousinnovation on the part of domestic manufacturers which is also not attributable to thephenomenon of patent hold-up in India. Thus it can be clearly absent in the Indian ICT sector.