R&D Spillovers & Productivity Growth: Evidence from Indian Manufacturing

This paper explores the linkage between R&D spillovers and productivity for a sample of Indian manufacturing firms for the period 2001- 2012. The R&D spillovers is defined as the function of R&D (R&D, royalty and technical know-how) and information and communication technology (ICT). We consider two measures of productivity, namely total factor productivity (TFP) and labor productivity for analysis. Our results show that ICT, R&D and technical know-how impact TFP. For labor productivity, our results demonstrate that firms that are engaged in ICT and invest in technical knowhow, are more productive than others. Thus, Indian manufacturing firms need to invest in information and communication technology, R&D and technical know-how to enhance their productivity. There are strong linkages among ICT, R&D, technical know-how and productivity.