In-house R&D, Importing Technology and R&D Tax Credit on the Productivity of Manufacturing Industry: Evidence from India

Baiju Pallayil, Sunil Kumar Ambrammal and Renjith Ramachandran

Studies in Microeconomics, 2025, vol. 13, issue 2, 207-231

Abstract: In-house R&D, importing technology and R&D tax credit play different roles in different economies. The role even may change among firms of various technological intensities. Therefore, this study investigates the impact of in-house R&D, importing technology and R&D tax credits on India’s manufacturing firms’ productivity according to their technological intensity. Our results show that R&D and technology imports have a significant and positive impact on productivity in all technologically intense industries. We have further estimated a substitute relationship between R&D and Importing Technology in high-tech, medium–high-tech and medium–low-tech industries. However, the complementarity relationship between R&D and importing technology appears more pronounced in low-tech industries. Further, the R&D tax credit policy positively impacts firm productivity in medium–high-tech, medium–low-tech and low-tech industries. In order to boost productivity, there need to be policies that support R&D, including R&D tax incentives for companies in all technologically intensive industries. JEL Classifications: C23, D24, O31, 032

Keywords: Productivity; R&D; tax credit; importing technology; technological intensity; India (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:miceco:v:13:y:2025:i:2:p:207-231

DOI: 10.1177/23210222231154056

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