The Determinants of Firms' Decision to Carry Out R&D Activities: the Evidence of Thai Manufacturing Sector

Abstract

This paper investigates the determinants of a firms' decision to carry out research and development (R&D) activities focusing on the role of firms' external factors and internal resources. Specific hypotheses about the factors effecting on the probability of a firm to carry out R&D activities are derived and tested on a sample of 3,520 firms in Thai Manufacturing sector. The study discovered that competitive market conditions and the structure of industrial production as the external factors affect firms' decision to carry out R&D activities. Firm's size, the availability of physical resources, human resources and technology resources as the internal resources also have influences on firms' decision to carry out R&D activities. The study revealed some differences in the R&D determinants among local firms, foreign joint ventures, small firms, and large firms. The results demonstrate the necessity for specific policies on the different types of firms.