Innovation plays a major role in determining exports of a country by strengthening domestic industries. The narratives of innovation and exports are important for national competitiveness. Therefore, this study, utilizing a meta-regression analysis, examines the impact of innovation on export performances. We conduct a meta-analysis from 27 empirical studies that contain 249 estimates undertaken during 1996–2019 with an aim to test whether the results of empirical studies are sensitive to various measures utilized and recognize possible policy implications. This study finds that innovation affects export performance across countries. We find strong evidence that developed countries' domestic innovation enhance their exports; however, for developing countries, innovation does not contribute to their exports. It indicates that within developing countries, the level of innovation efforts varies and concomitantly their inability to translate such efforts into exports.
This article examines the microeconometric evidence on the impact of government support for R&D and innovation. Our meta‐regression analysis uses a dataset of empirical evidence on the effects of government R&D policies on innovation and investigates the factors that may explain the differences in the estimated effects. The meta‐analysis is structured to include both the direct and indirect government support for R&D and innovation. The estimated results reveal the heterogeneity of empirical studies with respect to the type of incentive, data, and econometric methodology used. The results indicate that the output additionality effect is on average stronger for R&D tax incentives than subsidies. Studies that use the subsample of high technology sector show a stronger additionality effect of fiscal incentives on innovation. Moreover, small and medium enterprises have a stronger input additionality effect. The results also suggest that studies considered endogeneity issues have on average stronger additionality effect.
Research shows that the enforcement of patent rights (PRs) play a significant role in countries' innovation and technological development. The existing narrative reviews find that the impact of PRs on innovation is not clear across countries. Therefore, this study examines the impact of patent rights protection on innovation across countries by conducting a meta‐analysis from 14 empirical studies that contain 145 estimates, undertaken during 1996–2019. This study intends to test whether the findings are sensitive to various measures employed and identify possible policy implications across countries. Our analysis suggests that certain aspects of measuring innovation are crucial in explaining the significance of these findings. This study finds that countries' strength in PRs plays a significant role in determining its innovation. We also find that there is a distinction in PRs' contribution to domestic innovation across developed and developing countries in the existing primary studies.
PurposeThe study is an attempt to analyze the impact of foreign direct investment (FDI) on research and development (R&D) behavior of incumbent firms', both domestic and foreign, operating in Indian manufacturing sector. FDI inflows into the host country escalates the level of competition compelling domestic as well as existing foreign firms to adjust their spending on R&D. The purpose of this paper is to propose that response of domestic and existing foreign firms to the FDI entry vary, with domestic firms increasing their spending on R&D whereas foreign firms reducing it.Design/methodology/approachUsing a rich firm level data set from Indian manufacturing for the period 2000-2012, the study utilizes Heckman's two- step estimation strategy to estimate the impact of FDI entry on R&D behavior of incumbents.FindingsFDI entry significantly increases the tendency of domestic and foreign firms to invest in R&D; however, the impact on R&D intensity for both domestic and foreign firms appears to be minimal.Originality/valueThe study contributes to the existing literature on two fronts. One, unlike other studies, it examines the impact of FDI entry not only on R&D behavior of domestic firms but also on the R&D behavior of existing foreign firms. Second, it addresses the problem of selection bias that has been largely ignored by majority of empirical studies on R&D.
Firms in the developing countries transfer technology predominantly produced in the developed economies through different modes namely market-mediated channels including trade in goods and services, foreign direct investment, licensing or non-market channels like employees turnover. Multitude of host country's factors (locational and policy related) influences the mode-choice decision of multinational enterprises among exports, FDI and licensing to work in a host country. Among these factors, provision for the protection of patent rights reduces transactions costs that lead to externalization in form of arm's-length licensing against FDI. India has made patent policy changes during the post globalization period to comply with Trade Related Intellectual Property Rights Agreement. Accordingly, this study attempts to find the influence of the patent policy changes on licensing strategy of the Indian manufacturing industry. This paper is based on panel data of 51 industries for period 1989-90 to 2009-10. We have checked each panel data regression for the presence of heteroscedasticity, contemporaneous correlation and serial correlation. In case of the presence of heteroscedasticity and contemporaneous correlation the results are based on heteroskedastic panels corrected standard errors and correlated panels corrected standard errors. As the modeling is based on macro-panel data having large number of industries (N) and time period (T) each data series is checked for unit-root using panel data unit-root tests. The study uses Fisher type test. We estimate the model after controlling for the general policy changes in India following the liberalization, privatization and globalization of the economy. We are able to establish a substitutable relationship between licensing from international market and in-house R&D. The removal of licensing regulations of different industries has a positive influence on the firm's decision to license. We also find a complementary relationship between capital goods import and licensing. Thus, policy makers should allow for easy capital imports to facilitate technology transfers. The study indicates that patent policy influences technology transfer to India albeit negatively and limited to patent-sensitive industries confirming the monopoly power effect for such industries. Thus, policy makers have to use regulatory approach to facilitate transfers instead of merely relying on the market approach. Moreover, with respect to patent-sensitive industries there is need to closely watch the licensing behavior of the technology owners for anti-competitive practices.
