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Impact of R&D Spillovers on Firm-Level R&D Intensity: Panel Data Evidence from Electronics Goods Sector in India

In: Globalisation of Technology

Author

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  • Richa Shukla

    (Indian Institute of Technology Bombay)

Abstract

In this paper, we quantify the impact of R&D spillovers along with other firm-specific characteristics, such as the technology imports, firm size and age, in determining the in-house R&D intensity for a selected sample of electronic firms in India. This study, therefore, explores the significance of the R&D-induced technological efforts of electronic firms for the other R&D units operating within similar industry groups during the recent past decade of economic reforms (2002–2014). We construct an unbalanced panel of 63 electronic firms for the time period 2002–14 based on annual firm-level data available in CMIE Prowess database. Our results indicate that the Indian electronic firms benefitting from R&D spillovers within their line of business are spending relatively less on in-house R&D activities. However, for select industry groups within this sector, there also exists complementarity between (own) R&D efforts that are induced by the technological know-how obtained from innovations by others. Firms, therefore, look for spillover effects which are easier to obtain than their own in-house R&D whose results can be achieved in the medium or long term. We could possibly attribute this to the presence of multinationals in this sector and the resultant pressure on competition as driving these firms to spend more on R&D. While the (modern) Indian electronics goods sector predominantly consists of young-and middle-aged firms, but even then age of the firm (implying ‘learning by doing’) turns out to be positively significant. When we consider possible R&D spillovers within the similar industry group together with experience of the firms, it is observed that the relatively older firms are better equipped to benefit from such R&D spillovers and hence are incurring less R&D expenditure per unit of (net) sales. Small and medium firms catering to the huge consumer electronics market are more R&D intensive than their larger counterparts.

Suggested Citation

  • Richa Shukla, 2018. "Impact of R&D Spillovers on Firm-Level R&D Intensity: Panel Data Evidence from Electronics Goods Sector in India," India Studies in Business and Economics, in: N.S. Siddharthan & K. Narayanan (ed.), Globalisation of Technology, chapter 0, pages 203-225, Springer.
  • Handle: RePEc:spr:isbchp:978-981-10-5424-2_9
    DOI: 10.1007/978-981-10-5424-2_9
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    Cited by:

    1. Sukhdeep Singh, 2022. "R&D Spillovers and Product Market Competition," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 20(2), pages 379-399, June.

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