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Regional heterogeneity and firms’ innovation: the role of regional factors in industrial R&D in India

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  • Pradhan, Jaya Prakash

Abstract

This study makes an early attempt to estimate the magnitude and intensity of manufacturing firms’ R&D by Indian states during the period 1991‒2008 and analyses the role of regional factors on firm-level R&D activities. As there is little research on state-wise R&D performance of firms in India, this study serves an important contribution to the academic and policy realm. It has brought out the fact the total manufacturing R&D investment in India is unevenly distributed regionally with a few states accounting for disproportionate share of it. Regional heterogeneity or inter-state disparities in R&D has increased between the 1990s and the first decade of the twenty-first century. In view of this persistent regional heterogeneity in R&D, the study has developed and estimated an empirical model for a sample of 4545 Indian manufacturing firms with R&D facilities located in single state and that explicitly includes regional factors as probable factors affecting R&D. The three-step Censored Quantitle Regression results confirm that regional factors play an important role in shaping the R&D intensity of the sample of firms. This led us to some useful policy suggestions for regional governments to promote local firms’ R&D activities.

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  • Pradhan, Jaya Prakash, 2011. "Regional heterogeneity and firms’ innovation: the role of regional factors in industrial R&D in India," MPRA Paper 28096, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28096
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    More about this item

    Keywords

    Regional heterogeneity; R&D; manufacturing firms; Indian states; censored quantitle regression.;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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