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Knowledge sourcing and firm performance in an industrializing economy: the case of Taiwan in the 1990s

  • Chia-Lin CHANG
  • Stéphane ROBIN

This paper examines the impact of R&D and technology imports on firm performance in Taiwan’s manufacturing industry. Using a panel of 27,754 firms observed from 1992 to 1995, we estimate Translog production functions in twenty 2-digit industries. We implement four estimations procedures: fixed-effect regression, random-effect GLS, Hausman-Taylor estimator, and Stochastic Frontier Estimation. Our most reliable estimates, obtained with fixed effect and Hausman-Taylor models, show that knowledge inputs have a significant impact on firm sales in a small number of industries, and suggest that R&D and technology imports are more likely to be complements rather than substitutes.

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Paper provided by Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg in its series Working Papers of BETA with number 2006-33.

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Date of creation: 2006
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Handle: RePEc:ulp:sbbeta:2006-33
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  1. Cassiman, Bruno & Veugelers, Reinhilde, 2002. "Complementarity in the Innovation Strategy: Internal R&D, External Technology Acquisition and Cooperation," CEPR Discussion Papers 3284, C.E.P.R. Discussion Papers.
  2. Susan Athey & Scott Stern, 1998. "An Empirical Framework for Testing Theories About Complimentarity in Organizational Design," NBER Working Papers 6600, National Bureau of Economic Research, Inc.
  3. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
  4. Freeman, C., 1991. "Networks of innovators: A synthesis of research issues," Research Policy, Elsevier, vol. 20(5), pages 499-514, October.
  5. Branstetter, Lee & Chen, Jong-Rong, 2006. "The impact of technology transfer and R & D on productivity growth in Taiwanese industry: Microeconometric analysis using plant and firm-level data," Journal of the Japanese and International Economies, Elsevier, vol. 20(2), pages 177-192, June.
  6. Blumenthal, Tuvia, 1979. "A Note on the Relationship between Domestic Research and Development and Imports of Technology," Economic Development and Cultural Change, University of Chicago Press, vol. 27(2), pages 303-06, January.
  7. Chan, M W Luke & Mountain, Dean C, 1983. "Economies of Scale and the Tornqvist Discrete Measure of Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 663-67, November.
  8. Basant, Rakesh & Fikkert, Brian, 1996. "The Effects of R&D, Foreign Technology Purchase, and Domestic and International Spillovers on Productivity in Indian Firms," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 187-99, May.
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