Innovation and firm characteristics: evidence from India’s company-level data
Indian Growth and Development Review
ISSN: 1753-8254
Article publication date: 18 June 2024
Issue publication date: 12 August 2024
Abstract
Purpose
This paper tries to explain variation in company-level innovation activities based on certain firm-level characteristics in India between 2010 and 2020.
Design/methodology/approach
Probit and Heckman’s two-step estimation based on panel data consisting of annual consolidated financial statements of 8,529 companies.
Findings
Firm-level innovation activities were associated with larger company size, lower age, higher access to digital assets and voluntary expenses on environmental sustainability and social responsibility.
Research limitations/implications
This paper is based on company-level financial statements and hence does not include aspects related to human capital, managerial capacities, participation in the global value chain and collaboration with other industries or academia.
Originality/value
This paper uses alternative measures of innovation such as promotional expenses and holding of intangible assets by companies in India alongside R&D expenditure, which is largely used in the past literature. The company characteristics also include emerging areas such as digitalisation, and spending on environmental sustainability and social responsibility, in addition to the conventional factors such as firm size, age and exposure to exports.
Keywords
Acknowledgements
The Authors are from Reserve Bank of India, Mumbai. Views expressed in this paper belong solely to the authors and do not reflect those held by the Reserve Bank of India.
The authors sincerely thank Prof. Bishwanath Goldar for his constructive comments on this paper during the 6th Asia KLEMS Conference, Lonavala, India on 11–13, June 2023. The paper has also immensely benefitted from the comments of two anonymous referees during the review process by the journal. They also extend their gratitude towards Central Library, Reserve Bank of India for making CMIE Prowess data available to them. Research support extended by Shashank D. Bhujade is gratefully acknowledged.
Statements and declarations: The authors declare that no funds, grants or other support were received during the preparation of this manuscript. The authors have no relevant financial or non-financial interests to disclose. All authors contributed to the study conception and design. All authors read and approved the final manuscript. Views expressed in this paper belong to the authors and do not necessarily reflect those held by the institution that they belong to.
Citation
Chattopadhyay, S.K., Nath, S., Sengupta, S. and Joshi, S. (2024), "Innovation and firm characteristics: evidence from India’s company-level data", Indian Growth and Development Review, Vol. 17 No. 2, pp. 167-185. https://doi.org/10.1108/IGDR-08-2023-0108
Publisher
:Emerald Publishing Limited
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