The effects of knowledge capital on enhancing firms' productivity in Taiwan: Does R&D or technology import matter?

Aside from R&D capital, acquiring technologies directly from abroad is also an important way to accumulate knowledge capital for both newly-industrialized economies (NIEs) and developing countries. Technology imports thus should play as an alternative vital source to enhance firms' productivity. Using firm-level panel data on Taiwan's manufacturing, our empirical study shows that R&D capital indeed has a significantly positive impact on productivity as with the case for advanced countries. The external technological source, technology imports, also contributes significantly to the productivity level and growth for Taiwanese firms, and it seems to matter relatively more than firms' R&D expenditures do. Moreover, the R&D spillover effect is found to influence productivity significantly.