Technology innovation, productivity and competitiveness of manufacturing industries in Taiwan

The problem. The annual production growth rate of manufacturing in Taiwan has decreased dramatically since 1990. Many manufacturing firms in Taiwan are hesitant to invest more resources in research and development, and to put more emphasis on technology innovation.;Purpose. The purpose of this study was to examine the relationships between research and development expenditures, productivity and the level of competitiveness of the 20 industries in the manufacturing sector in Taiwan for the period of 1982-1992.;Method. This study was conducted using secondary data to answer the research questions. Information on the observed variables was collected chiefly from publications of government of the Republic of China. The data were analyzed using Pooled Cross-sectional analysis and Stepwise multiple regression, Pearson's r correlation, Spearman rank correlations, Two by two tables, and Kendall's W.;Results. The study found that R&D expenditures were an important factor contributing to the growth of output of manufacturing industries in Taiwan during the 1982-1992 period. It was found that R&D expenditures were positively correlated with (1) labor productivity, (2) capital productivity, (3) total factor productivity, (4) exports, (5) degree of export-orientation, and (6) value added in many industries during the research period. It was also found that higher R&D expenditures increased the competitiveness of domestic products and reduced the dependence on imported foreign goods.;The study showed that GDP was related strongly with applied and experimental research, as compared to basic research. The study also showed that R&D performing firms had higher sales and value added than firms that had no R&D activities. In addition, among R&D performing firms, firms with R&D departments had higher sales and value added than firms without R&D departments. The findings further showed that high export industries put more efforts toward developing new products during the research period.