Regional heterogeneity and firms’ innovation: the role of regional factors in industrial R&D in India

Jaya Prakash Pradhan

MPRA Paper from University Library of Munich, Germany

Abstract: This study makes an early attempt to estimate the magnitude and intensity of manufacturing firms’ R&D by Indian states during the period 1991‒2008 and analyses the role of regional factors on firm-level R&D activities. As there is little research on state-wise R&D performance of firms in India, this study serves an important contribution to the academic and policy realm. It has brought out the fact the total manufacturing R&D investment in India is unevenly distributed regionally with a few states accounting for disproportionate share of it. Regional heterogeneity or inter-state disparities in R&D has increased between the 1990s and the first decade of the twenty-first century. In view of this persistent regional heterogeneity in R&D, the study has developed and estimated an empirical model for a sample of 4545 Indian manufacturing firms with R&D facilities located in single state and that explicitly includes regional factors as probable factors affecting R&D. The three-step Censored Quantitle Regression results confirm that regional factors play an important role in shaping the R&D intensity of the sample of firms. This led us to some useful policy suggestions for regional governments to promote local firms’ R&D activities.

Keywords: Regional heterogeneity; R&D; manufacturing firms; Indian states; censored quantitle regression. (search for similar items in EconPapers)
JEL-codes: C21 L60 O18 O30 O32 (search for similar items in EconPapers)
Date: 2011-01-12
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ino, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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