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R&D and Technological Learning in Indian Industry: Econometric Estimation of the Research Production Function

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  • Amit Ray
  • Saradindu Bhaduri

Abstract

Estimation of research production functions has produced rich and useful results for developed countries in the past. This paper makes a pioneering attempt to estimate the same in the context of a less-developed country (LDC) (India). The objective is to examine the process of technology generation and learning in Indian industry. The existing literature recognizes two principal characteristics of technological activities in LDCs. First, their R&D effort is geared towards "minor" as opposed to "major" innovations. Second, technological learning constitutes an integral part of their research thrust. This paper attempts to capture these characteristics in a rigorous econometric framework by estimating a comprehensive research production function incorporating the role of learning. We use Indian firm-level in-house R&D data for two sectors: pharmaceuticals and electronics. Our study not only captures the role of learning in determining research effort and research output, but also re-examines some of the existing hypotheses relating to the effects of firm size, technology import and ownership. We find that the two sectors display two distinct learning trajectories, but in both cases learning proves to be crucially important in technology generation.

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  • Amit Ray & Saradindu Bhaduri, 2001. "R&D and Technological Learning in Indian Industry: Econometric Estimation of the Research Production Function," Oxford Development Studies, Taylor & Francis Journals, vol. 29(2), pages 155-171.
    • Handle: RePEc:taf:oxdevs:v:29:y:2001:i:2:p:155-171
    DOI: 10.1080/13600810120059306
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    4. Piva, Mariacristina., 2004. "The impact of technology transfer on employment and income distribution in developing countries : a survey of theoretical models and empirical studies," ILO Working Papers 993666903402676, International Labour Organization.
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