R&D and IT investments powering MSME performance for Indian industrial transformation

Barkha Dhingra, Tanu Kathuria, Ruhee Mittal and Mahender Yadav

International Journal of Sustainable Economy, 2026, vol. 18, issue 2, 101-119

Abstract: MSMEs are integral to India's economy, driving economic and social development through industrial output, job creation, exports, and fostering entrepreneurship. This study examines their performance by integrating research and development (R%D) and information technology (IT) into their business environment, aiming to boost revenue, cut costs, and improve customer engagement through e-business. While existing research often treats micro, small, and medium enterprises as a homogeneous group, this study distinguishes their performance by analysing the specific impacts of key determinants on each segment. This study employs panel data regression to examine the influence of IT and R%D intensity on performance. Results reveal the nuanced relationship between ROA and various factors, highlighting that the technology and innovation positively influence performance, but emphasising the need for tailored industry-specific initiatives. These findings offer valuable insights for policymakers, business leaders, and researchers, facilitating informed decisions on technology investment and fostering innovation guided by resource-based view (RBV).

Keywords: R%D intensity; IT intensity; capital intensity; panel data; micro; small; and medium enterprises; MSMEs; India. (search for similar items in EconPapers)
Date: 2026
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