Doing R&D and Importing Technology : an Empirical Investigation on TaiwanÕs manufacturing firms
Chia Lin, CHANG
The objective of this paper is to identify the determinants of the decision to innovate in Taiwan. Three Òinnovation strategiesÓ are considered : doing R&D only, importing technology only, and combining both. We estimate a Bivariate Probit on a panel of more than 27000 Taiwanese manufacturing firms observed from 1992 to 1995. Results suggest that the decision to R&D over the period was influenced by the prior changes in exportations at the industry level, whereas the decision to import technology is affected by the current changes. We identify a non-linear relationship between firm size and innovation. Moreover, older firms tend to innovate less, whereas market structure doesnÕt affect the decision to innovate. These two results change when only high-tech industries are considered : the effect of firmÕs age becomes insignificant, whereas a more concentrated market structure is shown to increase the probability to innovate.
R&D;importation of technology;market structure;technological opportunities;high-tech industries;panel data;bivariate Probit.
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