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Innovation And R&D Investment Of Tunisian Firms: A Two-Regime Model With Selectivity Correction

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Executive Summary

The purpose of the paper is to produce new empirical evidence regarding the determinants of R&D investment by Tunisian firms, through introducing the relationship between R&D expenditures and innovation effort of firms. The authors suppose that factors explaining in-house R&D are not the same according to whether the firm is innovating or not. This empirical analysis utilizes econometric models of selectivity correction (Heckman, 1976-1979; Lee, 1976-1978) and considers a sample of 320 firms during the period 2002-2005. On the one hand, econometrics results show a positive impact of R&D activities, human capital quality, past experience in innovation and publics subsidies on probability to innovate of firms whereas ownership structure (state and foreign owners) have a negative impact.

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