The effect of internal R&D expenditures and technology imports on value added in Iran's large and medium industries

In this study, the effect of internal R&D expenditures and technology imports on value added of Iranian large and medium industries is investigated over the period of 1994-2006. For this purpose, an endogenous growth model is used in which production is a function of employment, capital stock, internal R&D expenditures and capital-intermediate goods imports. We estimate this model for 21 industrial groups by applying panel data approach. The results indicate that internal R&D expenditures and capital-intermediate imports have a significant positive effect on value added of Iranian large and medium industries during the mentioned period. Therefore, the policy recommendations of this study are supporting R&D activities of large and medium industries by government and expanding commercial relation with industrial countries and technology leaders.