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Regional heterogeneity and firms' R&D in India

The present study seeks to examine the influence of regional factors on firm-level R&D activities in an emerging economy. Based on a unique firm-level dataset it shows that the total manufacturing R&D investment in India is unevenly distributed regionally with a few Indian regions and states accounting for disproportionate share of it. This inter-state disparity in the magnitude and intensity of manufacturing firms' R&D continued during the period 1991–2008. The empirical results obtained from a multidimensional framework of analysis confirm that a group of regional factors like the local abundance of science and technology (S&T) institutions, presence of greater number of foreign firms, and technology-intensive structure of manufacturing play an important role in shaping the R&D intensity of the sample of firms.