The Caribbean has one the lowest rate of Research and Development (R&D) investment by firms. Given the importance of R&D for firm growth and competitiveness, the study investigates the determinants of the firm’s decision to engage in R&D activities. With the many competitive forces in the business environment, investment in R&D is critical to a firm staying ahead of its competitors. These activities are, however, costly due to relatively high sunk costs. Using World Bank Enterprise Survey (see http://www.enterprisesurveys.org/) database, we assess firm-level data on thirteen (13) Caribbean nations. A cross-sectional regression analysis is used to examine the firms’ motives for R & D efforts. The explanatory variables used in this analysis included indicators of competitiveness (the number of employees, the education level of workers, age of business, market competitors, managerial experience), technological orientation (internet connection, use of email, online services, cell phone usage), gender ownership and management, foreign ownership and firms’ credit limitation while controlling for firm size and industry. The findings could be used by policy makers in the region to encourage greater R&D activity in the region.
Caribbean Firms and the Decision to Invest in R&D
Abstract
