Testing Schumpeterian Hypothesis with Data from a Developing Country: R&D Investment and Size of Firms in Thailand

Even though the Schumpeterian hypotheses have been tested for several decades, there are very limited numbers of studies using data from developing countries. Existing literatures on developing countries tend to concentrate on some particular countries. This study provides another test of Schumpeterian hypotheses using data of Thai firms. The results partly support the Schumpeterian hypotheses. The study shows that firm size affects the decision to undertake R&D. However, upon firms undertaking R&D, R&D intensity does not increase disproportionately with the size of the firms, all else constant. Moreover, the skilled work forces are relatively more important for firms undertaking R&D than the financial aspects. These findings are essential for the improvement of current policy regarding R&D in Thailand.