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Doing R&D and/or Importing Technologies: The Critical Importance of Firm Size in Taiwan's Manufacturing Industries

CHIALIN CHANG and STÉPHANE ROBIN
Review of Industrial Organization
Vol. 29, No. 3 (November 2006), pp. 253-278
Published by: Springer
Stable URL: http://www.jstor.org/stable/41799311
Page Count: 26
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Doing R&D; and/or Importing Technologies: The Critical Importance of Firm Size in Taiwan's Manufacturing Industries
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Abstract

We analyze the relationship between firm size and innovation inputs in Taiwan. Two inputs are considered: R& D and technology imports. Building on an existing theoretical framework, we test this relationship by estimating bivariate Tobit models in twenty 2-digit industries, using a panel of 27,754 firms observed from 1992 to 1995. We find that, in all industries, R&D intensity and/or technology imports intensity depend strongly on firm size, following an "inverted-U" pattern. Moreover, we find that most industries are only "mildly Schumpeterian". Finally, our results provide some empirical evidence for complementarity between R& D and technology imports in the innovation process.

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