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Innovation And R&D Investment Of Tunisian Firms: A Two-Regime Model With Selectivity Correction

  • Zouhour Karray


    (Faculté des Sciences Economiques et de Gestion de Nabeul)

  • Mohamed Kriaa
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    The purpose of the paper is to produce new empirical evidence regarding the determinants of R&D investment by Tunisian firms, through introducing the relationship between R&D expenditures and innovation effort of firms. We suppose that factors explaining in-house R&D are not the same according to whether the firm is innovating or not. Our empirical analysis utilizes econometric models of selectivity correction (Heckman, 1976-1979; Lee, 1976-1978) and considers a sample of 320 firms during the period 2002-2005. On the one hand, econometrics results show a positive impact of R&D activities, human capital quality, past experience in innovation and publics subsidies on probability to innovate of firms whereas ownership structure (state and foreign owners) have a negative impact. While on the other hand, when estimating the determinants of R&D expenditures for the two groups of firms (innovating and non-innovating) we find interesting results; there are spillover effects only for innovating firms and which have an absorptive capacity. Also channels for acquisition of external technologies play an important role in explaining R&D expenditures. Finally, ownership structure has a significant impact on R&D investment especially for foreign controlled firms. The effect is positive for innovating firms and negative for noninnovating firms.

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    Paper provided by Economic Research Forum in its series Working Papers with number 484.

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    Length: 26 pages
    Date of creation: Apr 2009
    Date of revision: Apr 2009
    Publication status: Published by The Economic Research Forum (ERF)
    Handle: RePEc:erg:wpaper:484
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