ABSTRACT
This chapter describes the extent of inventive activity in the manufacturing sector of a large less developed countries, viz., India. If the true extent and nature of innovative activity being undertaken by manufacturing firms in India is not known, even less is known about the determinants of firms’ decisions to undertake formalized inventive activity, such as research and development (R&D). An indicator of inventive activity-especially of the intermediate output of inventive activity-is the number of patents granted to Indian nationals. In his analysis of Indian firm-level R&D intensities, N. S. Siddharthan included lump-sum payments for foreign technology per sales Rupee as an additional explanatory variable to test the complementarity hypothesis. A. B. Deolalikar and Robert E. Evenson argue that, insofar as much of Indian inventive activity involves modification and adaptation of technologies already developed elsewhere, the potential pool or supply of internationally available technologies may act as a constraint to indigenous inventive activity in India.
