Authors: Thanapol Srithanpong
This paper empirically examines the relationship between exports, innovation, R&D (Research and Development), and productivity in Thai manufacturing, using cross-sectional data from the 2007 Industrial Census of Thailand. We utilize a simplified structural model (CDM model) that describes the link between exports, innovation output, R&D and productivity for the Thai case. Various estimation techniques; namely, ordinal probit/logit, ordinary probit/logit regression, Heckman selection model, and various OLS (Ordinary Least Squares) estimators are used to compare and provide evidence for empirical results. Our findings suggest that government aid and firm characteristics play an important role for a firm to engage in R&D and to be innovative both in terms of process innovation and product innovation. Exporting firms, firms in the central region, and firms that are categorized as Head Branch type are more likely to engage in R&D and be innovative. Moreover, the type of industry and specific technological characteristics of firms are shown to influence innovation effort and decision to undertake R&D. Two puzzling findings are the negative relationship between R&D and innovation and negative relationship between process innovation and productivity. Overall, firm size, foreign ownership, exporting and product innovation are important drivers of productivity enhancement in the Thai manufacturing sector.
Keywords: Productivity, Exports, Innovation, R&D, Thailand