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Evaluating Market Structure-R&D Expenditure Relationship in Iran’s Manufacturing Sector (A panel smooth transition regression approach)

Author

Listed:
  • Norani Azad, Samaneh

    (Assistant Professor of Economics, Payame Noor University,Tehran, Iran)

  • Kodadad Kashi, Farhad

    (Professor of Economics, Payame Noor University, Tehran, Iran)

Abstract

The main purpose of this article was testing the relation between competition and innovation in Iran’s manufacturing industry. To meet this ends the data of 130 Iran’s 4-digit industries over the period of 1996-2013 were used. Also, this article sought to analyze this relationship by using a panel smooth transition approach. The results indicated that, clearly there was the nonlinear relationship among variables and by increasing concentration until threshold value 0.267 the research and development intensity increased but after this threshold value, its effect decreased.Moreover in the second model by increasing research and development intensity till the threshold value of 0.38 percentage the concentration increased and after that, this impact has been decreased. In addition, only in 6% of Iran's industries competition and innovation was high but, in most industries by increasing concentration, innovation declined. Overall, there was an asymmetric relationship between competition and innovation and in most industries the intensity of research and development expenditures were low. So, in Iran’s industries, the inverse U relation between innovation and competition confirmed

Suggested Citation

  • Norani Azad, Samaneh & Kodadad Kashi, Farhad, 2020. "Evaluating Market Structure-R&D Expenditure Relationship in Iran’s Manufacturing Sector (A panel smooth transition regression approach)," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 6(4), pages 27-52, February.
    • Handle: RePEc:ris:qjatoe:0172
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    More about this item

    Keywords

    research and development expenditure; innovation; Competition; Schumpeter; panel smooth transition regression model;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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