Determinant Factors of Absorptive Capacity and Innovation in Iranian Industry’s firms (Focus on Firm Size, Labor Productivity and Value of Production)

The successful economies are ones that have effective system to transform knowledge and technology in economic capacity. They have complex system that is an important sector of their economy. The current approach moving to knowledge based society is attention to R&D activities and high technologies. In this path, industrial companies can have a vital role in creating, developing and applying of innovation. In this paper, meanwhile analyze the absorptive capacity and innovation in Iran; we analyzed the determinant factors of R&D activity as a proxy for absorptive capacity and innovation in Iran's industries by using GMM approach in dynamic panel data (DPD) for the period of 2009-2013. The all industries are classified in 23 industrial sectors on the base of two-digit codes of ISIC. The results showed the firm size, labor productivity, and value of production and export are determinant factors of innovational activities in Iran's industries. Therefore, we suggest the support of improving of absorptive capacity and innovation through attention to determinant factors.