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The Various Effects of Technology Trade on the Sustainable Market Value of Firms in OECD Countries

Author

Listed:
  • Hyunchul Lee

    (Division of Business Administration, Chosun University, Gwangju 61452, Korea)

  • Kyungtag Lee

    (School of Business, Yeungnam University, Gyeongsan 38541, Korea)

  • Jong Ha Lee

    (Department of International Trade, Chosun University, Gwangju 61452, Korea)

Abstract

This study explores the various effects of technology trade on the sustainable market value of firms in 36 OECD member countries using panel data estimations. To proxy technology trade activities, our study uses the technology export and import growths of intellectual property rights (IPRs). We suggest that technology imports, proxied by IPR imports, increase the market value of firms in our sample countries. The net technology imports (exports) are also positively (negatively) associated with the sustainable value of the firms. We use panel data regression to analyze the specific effects of the trade (i.e., imports and exports) of technology assets, proxied by IPRs, on the market value of firms proxied by country benchmark composite stock returns in 36 OECD member countries. For robustness, our study uses an instrumental variable estimation to check for the possible effects of endogeneity biases for the baseline results. System dynamic panel regressions further examine the effect of the dependent variable’s persistence. We find evidence of nonlinear effects for IPR exports and net IPR trade on the sustainable market value of firms. The positive effect of technology imports on the market value of firms is stronger at the lower and middle levels of the distribution of the firm value of stock returns, and this suggest heterogenous effects of technology trade across the quantiles. Overall, the empirical findings from our panel study suggest that the positive effects of technology trade for the market value of firms are due to the effect of its imports rather than exports.

Suggested Citation

  • Hyunchul Lee & Kyungtag Lee & Jong Ha Lee, 2021. "The Various Effects of Technology Trade on the Sustainable Market Value of Firms in OECD Countries," Sustainability, MDPI, vol. 13(22), pages 1-20, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:22:p:12671-:d:680678
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