R&D strategy of small and medium enterprises in India: Trends and determinants

Jaya Prakash Pradhan

MPRA Paper from University Library of Munich, Germany

Abstract: The liberalization of economic policies in the last two decades and intensifying market competition tend to be a cause of policy concern for the survival of SMEs in emerging economies like India as these firms accounts for the largest chunk of industrial units and employment. Given their limited financial and intangible resources, the promotion of R&D among SMEs has become a very important policy parameter. The aim of this paper is to contribute to the literature on Indian R&D by analyzing the trends and patterns of R&D investment by Indian manufacturing SMEs during the period 1991−2008 and exploring various factors that determine their R&D behaviour. The results show that Indian SMEs have lowest incidence of doing in-house R&D and their R&D intensities have fallen in the last decade. A number of factors that play important role in determining SME R&D have been identified based on the three steps Censored Quantile Regression and some useful policy implications are suggested for enhancing R&D activities of small firms.

Keywords: SMEs; R&D; Business Groups; Foreign Firms (search for similar items in EconPapers)
JEL-codes: F23 L11 L22 O31 O32 (search for similar items in EconPapers)
Date: 2010-02-24
New Economics Papers: this item is included in nep-cse, nep-cwa, nep-ent, nep-ino and nep-sbm
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Citations: View citations in EconPapers (1)

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