Affiliation:
1. Department of Humanities and Social Sciences, National Institute of Technology, Ponda, Goa, India
2. Economics Area, Indian Institute of Management, Ranchi, Jharkhand, India
Abstract
In-house R&D, importing technology and R&D tax credit play different roles in different economies. The role even may change among firms of various technological intensities. Therefore, this study investigates the impact of in-house R&D, importing technology and R&D tax credits on India’s manufacturing firms’ productivity according to their technological intensity. Our results show that R&D and technology imports have a significant and positive impact on productivity in all technologically intense industries. We have further estimated a substitute relationship between R&D and Importing Technology in high-tech, medium–high-tech and medium–low-tech industries. However, the complementarity relationship between R&D and importing technology appears more pronounced in low-tech industries. Further, the R&D tax credit policy positively impacts firm productivity in medium–high-tech, medium–low-tech and low-tech industries. In order to boost productivity, there need to be policies that support R&D, including R&D tax incentives for companies in all technologically intensive industries. JEL Classifications: C23, D24, O31, 032
Subject
General Economics, Econometrics and Finance