Abstract

Access to foreign technology is important for small and medium sized companies. Most small and medium sized firms face with constraints resulting from financial, institutional and structural issues. In developing countries, most firms tend not to invest in Research and Development (R&D), resulting in lack of innovation. Besides, R&D is important to enter in international markets, in the determination of firm’s competition level, sustaining growth as well as to obtain a more advanced technology. Therefore, exhibiting the factors determining R&D level for companies becomes crucial to make well-targeted policies both in government and firm levels. This study aims to analyze the participation and expenditure decisions of Turkish manufacturing firms in R&D activities employing Heckman selection model taking region and industry effects into consideration. The results demonstrate that human capital, government funding of R&D and the scale of the firm are related to R&D decisions.

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