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.
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