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

Samaneh Norani Azad () and Farhad Kodadad Kashi ()
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Samaneh Norani Azad: Assistant Professor of Economics, Payame Noor University,Tehran, Iran
Farhad Kodadad Kashi: Professor of Economics, Payame Noor University, Tehran, Iran

Quarterly Journal of Applied Theories of Economics, 2020, vol. 6, issue 4, 27-52

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

Keywords: research and development expenditure; innovation; Competition; Schumpeter; panel smooth transition regression model (search for similar items in EconPapers)
JEL-codes: C24 L10 L60 O31 (search for similar items in EconPapers)
Date: 2020
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