The Effects of Internal R&D Expenditures and Intermediate - Capital Imports on Productivity and Value Added in Iranian Provincial Industries

Subject Areas : Business Management

Manijeh  Taghilou Barzelaghi ¹ (Department of Economics, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
Gholamhosein  Rahnomay Garamaleki ² (Master of Science (Economics), Department of Economics, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
Monere  Dezaji ³ (Faculty Member, Economics Department, Tabriz Branch, Islamic Azad University, Tabriz, Iran)

Received: 2013-05-29 Accepted : 2013-08-05 Published : 2013-12-22

Keywords: Panel Data, Internal R&amp, D Expenditures, Intermediate-Capital Imports, Iranian Provincial Industries,

Abstract :

The gap in industrial indices among the provinces of the country and their unbalanced trend of economic growth and development requires, more than ever, considering the abilities and potentials of each region. Accordingly, research and development and intermediate – capital imports lead to the harmonious and dynamic growth of all regions and increase their industries’ competitive ability through technology improvement. Thus, this study investigated the effect of internal R&D expenditures and capital-intermediate imports on the productivity of Iranian industries over the period 1995-2008. For this purpose, total factor productivity function and production function were estimated by applying panel data approach. The results indicated that internal R&D expenditures and capital-intermediate imports had a significant positive effect on the productivity and value added of Iranian industries during the mentioned period. Therefore, the research recommends that the government support R&D efforts of industries in order to improve their technology and production methods and provide their access to modern technologies of the world through import.

References:

Agheli Kohneh Sh. L. (2006). Estimation of Mining Production Function of the Country. Quarterly Journal of Economic Research, 6(1), 33-50, (In Persian).

Aghion, P. & P. Howitt (1992), A Model of Growth Through Creative Destruction, Econometrica, Vol.60, No.2, PP.323-351

Akkoyunlu, A., S. Mihci & H. Arsalan (2006), The Custom Union with EU and Impact on Turkey’s Economic Growth, 8th ETSG (European Trade Study Group) Annual Conference-Vienna.

Amini, A., & Hejazi Azad, Z. (2008). Analyzing the Role of Human Capital and R & D in Promoting Total Factor Productivity in Iranian Economy. Iranian Journal of Economic Research, 10(35), 1-30, (In Persian).

Azerbaijan, K. (1989). Measurement and Analysis of Productivity of Industries. Research Plan of Planning and Budget Organization of Isfahan Province, (In Persian).

Azerbaijan, K. (1990). The Econometric Model of Factors Influencing on the Productivity of Country Industrial. Research Plan of the Planning and Budget Organization of Isfahan Province, (In Persian).

Awokus, T.O. (2007), Causality between Exports, Imports, and Economic Growth: Evidence from Transition Economics, Economic Letters, Vol.94, PP.389-395

Bernstein, J.I. & P. Mohnen (1998), International R&D Spillovers between U.S. and Japanese R&D Intensive Sectors, Journal of International Economics, Vol.44, No.2, PP.315-338

Coe, D.T. & E. Helpman (1995), International R&D spillovers, NBER Working Paper, No. W4444.

Dieppe, A. & J. Mutl (2013), International R&D Spillovers Technology Transfer vs. R&D Synergies, European Central Bank Working Paper, No. 1504

Evenson, R.E. & L. Singh (1997), Economic Growth, International Technological Spillovers and Public Policy: Theory and Empirical Evidence from Asia, Center Discussion paper, No.777

Farshadfar, Z. (2006). Investigating the Manpower Productivity in Agricultural and Industrial Cooperative Companies of Kermanshah Province. Research Plan of Cooperative Directorate of Kermanshah Province, (In Persian).

Greene, W.H. (2002), Econometric Analysis, Prentice-Hall Inc., USA, Fifth Edition

Grossman, G.M. & E. Helpman (1991), Quality Ladders in the Theory of Growth, Review of Economic Studies, Vol.58, No.1, PP.43-61

Hall, J. & G.M. Scobie (2006), The Role of R&D in Productivity Growth: The Case of Agriculture in New Zealand: 1927 to 2001, New Zealand Treasury Working Paper, No. 06/01

Hasan, R. (2000), The Impact of Imported and Domestic Technologies Productivity: Evidence from Indian Manufacturing Firms, East-West Center Working Papers, No.6

Hasan, R. (2002), The Impact of Imported and Domestic Technologies on the Productivity of Firms: Panel Data Evidence from Indian Manufacturing Firms, Journal of Development Economics, Vol. 69, PP. 23-49

Hemmat Joo, A. (2003). Measuring the Productivity of East Azarbayjan Province Industries and Analyzing the Factors Affecting on it, Research Project, Management and Planning Organization of East Azarbaijan Province, (In Persian).

Hosseini Nasab, I., & Gohachi, R. (2007). Foreign Trade and Growth of Productivity in Iran Industrial Factory. Quarterly Journal of Economic Research7(1), 92-75, (In Persian).

Jalaii, A. M., Sadeghi, Z. A., & Ali Badeh Gharaee, H. (2008). Investigating the Stretch between Imports of Intermediary Goods, Labor Force and Capital in Iran, Transglobal Cost Functional Approach. Economic Research, 82, 53-68, (In Persian).

Jafari Mehr, I. (2008). An Investigation of the Economic Transformation Plan: The Achilles Heel Efficiency of Iranian Economy. Gozaresh Monthly, 202, 11-13, (In Persian).

Jones, C.I. (1995), R&D-Based Models of Economic Growth, Journal of Political Economy, Vol.103, No. 4, PP. 759-784

Kamijani, A., & Shahabadi, A. (2001). The Effect of Internal and External R & D Activities (through Foreign Trade) on the Total Productivity of Production Factors. The Journal of Commerce, 5(18), 29- 68, (In Persian).

Kondo, M. (2001), Technology Acquisition and Mastering for Development, UNIDO Industrial Development Forum (General Conference of UNIDO), Ninth Session-Vienna

Liao, H., Liu, X., Holmes, M. and Weyman-Jones, T. (2009), The Impact of Foreign R&D on Total Factor Productivity in the East Asian Manufacturing Industry, The Manchester School, Vol.77, No.2, PP.244-270

Mehrabi Basharabadi, H., & Javdan, I. (2011). The Effect of Research and Development on Growth and Productivity in Iranian Agriculture. Economics and Agricultural Development, 25(2), 171-180, (In Persian).

Mohammadzadeh, P., Mamypour, S., & Feshari, M. (2010). Application of STATA Software in Econometrics. Tehran: Noor Science and Faculty of Economic Sciences, (In Persian).

Mellatparast, M., & Bodaghi, L. (2001). Analysis of Research and Development Activities in the Industry in the Form of Technology Network, Proceedings of the Third International Conference of Industrial and Mines Research and Development Centers, (In Persian).

Mohammadzadeh, M. (2008). Analysis of Factors Influencing on the Total Productivity of Production Factors in Iranian Tractor Company. PhD Thesis, Tabriz: Tabriz University, (In Persian).Mullai, M. (2005). Comparison and Comparison of the Productivity of Various Small and Large Industrial Groups in Iran. Iranian Journal of Economic Research, 7(22), 157-176, (In Persian).

Park, W.G. & D.A. Brat (1996), Cross-Country and Growth: Variations on a Theme of Mankiw-Romer-Weil, Eastern Economic Journal, Vol.22, No.3, PP. 345-359

Pingfang, Z. & L. Lei (2007), Direct Effect of Ownership and Technology Import: Firm Level Evidence from Large and Medium-Enterprises in Shanghai, Frontiers of Economics in China, Vol. 2, No. 1, PP.74-91

Romer, D. (2006), Advanced Macroeconomics, McGraw-Hill Companies, USA, Third Edition

Romer, P.M. (1990), Endogenous Technological Change, Journal of Political Economy, Vol. 98, No.5, PP.S71-S102

Sadeghi, M., & Emadzadeh, M. (2003). Estimation of Human Capital Contribution to Iran's Economic Growth, Iranian Journal of Economic Research, 17, 98-79, (In Persian).

Shahabadi, A. (2005). Sources of Growth in Industries and Mines of Iran's Economy. Economic Issues, 2(4), 80- 55, (In Persian).

Shah Abadi, A., & Rahmani, O. (2008). The Role of Domestic and Foreign R & D Accumulation on the Growth of Total Factor Productivity of the Industrial Sector. Journal of Economics and Business Novin, 14, 18- 38, (In Persian).

Shah Mirzaii, A. (2004). From Economic Policy to Industrial Policy: A Review of the Industrial Development Strategy of Iran. Tehran: Stiri Publishing, (In Persian).

Shahsavar Jalavat, A. (2001). The Study of the Status of R & D Units of the Province and the Explanation of the Current Position and the Formulation of Guidelines and Guidelines for the Development of these Units, the Collection of Articles of the 3 rd International Conference of Research and Development Centers of Industries and Mines, (In Persian).

Shahrivar, R.B. & I.B. Jajri (2012), Investigating the Interaction between FDI and Human Capital on Productivity Growth, Research Journal of International Studies, No.23, PP.76 -93

Sharma, C. (2011), Imported Intermediary Inputs, R&D and Firm’s Productivity: Evidence from Indian Manufacturing, German Development Economics Conference, No.74

Sobhani, H., & Aziz Mohammadloo, H. (2008). Comparative Analysis of Total Factor Productivity in the Sub-sectors of Iran's Great Industries. Economic Research, 82, 119-87, (In Persian).

Snowdon, B. & H.R. Vane (2005), Modern Macroeconomics, Edward Elgar Publishing, USA

Svensson, R. (2008), Growth through Research and Development- What Does the Research Literature Say?, VINNOVA-Swedish Governmental Agency for Innovation Systems

Sylwester, K. (2001), R&D and Economic Growth, Journal of Development Economics, Vol.13, No.4, PP.71-84

Tseng, Chun-Yao. (2008), Internal R&D Effort, External Imported Technology and Economic Value Added: Empirical Study of Taiwan's Electronic Industry, Applied Economics, Vol.40, No.8, PP. 1073-1082

Toufiq, A. A. (2000). Management of R & D Units in Production Units, Proceedings of the First National Congress of Research and Development Centers of the Country. Tehran: Iranian Research and Training Center, (In Persian).

Valizade Zenoz, P. (2005). Exploring the Efficiency in Iran's Economy. The Office of Economic Research and Policy, Central Bank of Iran, (In Persian).

Wieser, R. (2001), R&D and Productivity: Empirical Evidence at the Firm Level, WIFO Working Paper, No. 158.

Zara Nezhad, M., & Ansari, E. (2007). Measuring the Productivity of Industries in the Large Industries of Khuzestan Province. Journal of Economic Reviews, 4, 26-1, (In Persian).