Relationship between R&D and Firm Size in the Small Industry Sector of Karnataka

The relationship between Research&Development (R&D) and firm size is one of the widely discussed research issues in industrial economics. Earlier studies on this issue have come out with contradictory and diverse research findings. This paper analyses this relationship in the context of small industry in Karnataka. The analysis is done in terms of R&D objectives, sources, dimensions, inputs and its variance with firm size in the small industry. In addition, it has probed the relationship between R&D and factor productivities. The analysis includes in addition to overall sectoral perspective, the industrial and regional dimensions. The results indicate that when the R&D activities and related factors are similar in nature, R&D intensity exhibits a negative relationship with both firm size and factor Productivities. We have observed this phenomenon not only for the overall sector but also across industries and sub-regions.