Export behaviour and Innovation — A tobit analysis

For any firm, knowledge acquisition happens in either of the two ways. One being internal Innovation and the other one being knowledge transfer which happens as a result of International activities like Exports and imports. This paper studies the relationship between these two methods of knowledge acquisition. Indian Chemical industry in itself is unique because it consists of different sub sectors which behave differently. The R&D intensity determinants of the sub sectors of Chemical industry are studied in this paper based on two sets of independent variables namely Firm specific characteristics and market concentration. Censored Tobit regression was employed. It was found that both in Chemical as well as Pharma industries, the Export orientation of the firm positively contributes to the R&D intensity of the firm.