Does R&D spur firm performance in Indian agricultural inputs industry? An empirical evidence using panel data regression models
by R.L. Manogna; Aswini Kumar Mishra; Shikhar Jain
International Journal of Business Innovation and Research (IJBIR), Vol. 29, No. 1, 2022

Abstract: Agricultural input industries in India have gone through a vital transformation in the last 20 years. Multinational corporations have swiftly increased their R&D expenditure in the pesticide, tractor and seed industries, thereby increasing competition in these input industries. Rapid growth in demand and improvement in technology implementations have lead us to study the performance and transformation of these input industries. Empirical analysis was performed on the listed firms during 2001-2018 to know the major factors affecting the firm performance in the seed, pesticide, fertiliser and agricultural machinery industries. The estimated panel regression models reveal that financial performance of these firms is positively related to the R&D expenditure along with market growth and working capital efficiency. Industry effects model, used to capture the industry-level heterogeneity shows that fertiliser and pesticide industries are seen to negatively impact the firm performance relative to machinery industry. Among the time-specific effects, only the time period 2006-2010 is found to be positive and statistically significant, confirming that the performance of agricultural input firms has significantly improved during the period 2006-2010. The study indicates that the policymakers should foster the spirit of innovation and outward orientation in agricultural input firms through policy incentives.

Online publication date: Mon, 26-Sep-2022

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