The Effect of the Import Competition on Research and Development Activities in Iran’s Manufacturing Industries

According to economic theory, it is expected that by increasing import, competition for domestic enterprises increase and to maintain market share, they carry out innovative and R&D activities. So, in this study, the effect of import competition on R&D in Iran’s manufacturing industries was investigated. For this purpose, the Data from Iranian manufacturing was used in the form of four-digit ISIC codes for the period of 1994-2013. The results of model estimation based on dynamic panel data by SYSGMM approach showed import increase reduces R&D activities in the industry. Also, despite the fact that profiitebilty of industries has a negative impact on R&D activities, import increase in high-profit industries lead to R&D activities increase. In addition, the results indicate that R&D activates in industries with human capital and large firm is more, and import increase also encourages R&D activities in these industries.