The Impact of Internal R&D Expenditure, Technology Imports and Interaction Effects between Human Capital and Technology Imports on Value added in Iran's Large Industries

In this study, the Impact of internal R&D expenditure, technology imports and interaction effects between human capital and technology imports on value added of Iranian large industries are investigated over the period of 1994-2008. For this purpose, an endogenous growth model is used in which production is a function of labor, capital stock, human capital, internal R&D expenditure, technology imports, multiplication of employment share of human capital and technology imports, and multiplication of internal R&D expenditure and technology imports. We estimate this model for 21 industrial groups by applying panel data approach. The results indicate that internal R&D expenditure and technology imports have a significant positive effect on value added of Iranian large industries. Also, research findings emphasize the positive effect of human capital in absorbing imported technology and consequently, increasing industry value added.