In‐house technological effort, imports of technology and enterprise characteristics in a newly industrializing country: The Indian experience

This paper uses data of Indian enterprises to examine two questions about their technological efforts and their imports of technology. Do the technology‐importing enterprises have sufficient in‐house capabilities to be able to assimilate and make effective use of their imports, and is the level of an enterprise's technological effort influenced by its size and age. Empirical tests, using a probit probability model and partial correlation analysis, showed that the number of enterprises that went in for an import of technology was significantly higher than could be predicted on the basis of their in‐house technological expenditures (and achievements) and that the latter two variables themselves were negatively influenced by the size and age of the enterprise. These results seem consistent with the hypotheses that in the Indian economic environment enterprises use their imported technologies mainly to start a new product line as quickly as possible, and so do not prepare themselves with much technological effort, and that larger enterprises, having an advantage in negotiating technology‐import agreements, have relatively little incentive for in‐house technological effort.