Testing Schumpeterian Hypothesis with Data from a Developing Country: R&D Investment and Size of Firms in Thailand

Abstract

Even though the Schumpeterian hypotheses have II. R&D INVESTMENT AND FIRM SIZE been tested for several decades, there are very limited numbers of studies using data from developing countries. Existing literatures A. Overview on developing countries tend to concentrate on some particular The relationship between firm size and innovation countries. This study provides another test of Schumpeterian hypotheses using data of Thai firms. The results partly support (normally measured by R&D investment as an iput of the Schumpeterian hypotheses. The study shows that firm size innovation) is originally proposed by Schumpeter [1] -[2]. affects the decision to undertake R&D. However, upon firms For seven decades, his hypotheses have generated numerous undertaking R&D, R&D intensity does not increase studies, yet yielding inconclusive results. Selected major disproportionately with the size of the firms, all else constant. studies investigating these hypotheses include Scherer [3] -Moreover, the skilled workforces are relatively more important [5] Scmookler [6] -[7] Mansfield et al [8] Freeman [9]for firms undertaking R&D than the financial aspects. These C5]