Imported Intermediate Inputs,R&D,and Productivity at Firm Level: Evidence from Indian Manufacturing Industries

This article examines the effects of imported intermediary inputs and in-house research and development (R&D) on productivity growth, using firm-level data from Indian manufacturing industries for the period 2000–09. For this purpose, we adopted two empirical frameworks: production function and growth accounting method. The estimated results from the production function framework suggest that the impact of imported intermediary goods on output is reasonably sizable. The role of R&D activities under this framework is found to be insignificant. The analysis based on the growth accounting suggests that total factor productivity of firms is linked with import and R&D activities.