Impact of research and development (R&D) and information, and communication technology (ICT) on innovation and productivity evidence from Tunisian manufacturing firms

Abstract

This study aims to examine the ability of Tunisian manufacturing firms to invest in innovation activities and to transform these investments on innovation outputs and if these outputs have contributed to productivity improvements. It explores the relationship between research and development (R&D), information, and communication technology (ICT) use, product and process innovations and productivity. The study presents an application of the augmented Crépon-Duguet-Mairesse (CDM) model for 238 manufacturing firms in Tunisia. Results show that R&D is an important predictor for product innovation, but not for process innovation. The use of ICT has a positive impact on both innovation types, but this impact is more important for the case of process innovation. Furthermore, the study shows the possible existence of a complementary relationship between R&D and ICT. The firms that combine R&D with ICT use increase their probability to introduce product and process innovation. R&D and ICT are also an important indirect driver of firm productivity through innovation activities. Thus, the results show a positive impact of product innovation on firm-level productivity. However, process innovation has a significant impact only if it is combined with product innovation. The study also identifies guidelines for development actors to better transform ICT and R&D into innovation and productivity in Tunisian economy.