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Impacts of research and development on manufacturing trade

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  • Stefan Bojnec

    ()
    (University of Primorska, Faculty of Management, Koper, Slovenia)

  • Imre Ferto

    (Corvinus University of Budapest and Hungarian Academy of Sciences, Budapest, Hungary)

Abstract

The basic aim of the research is to investigate the impacts of research and development (R&D) on manufacturing trade. Six hypotheses are tested. The focus is on possible non-linear effect of R&D on trade flows and whether R&D helps overcome the distance and the role of level of economic development on manufacturing trade. The panel unit root test and panel econometric methods are employed on the adapted gravity trade model using the panel data for Organisation for Economic Cooperation and Development (OECD) countries during the period 1995-2003. The results of the research indicate that R&D is positively associated with manufacturing trade for exporting countries, while results are mixed for importing countries. The results reject the non-linear relationship between R&D and manufacturing exports. Estimations suggest that R&D may contribute to overcoming the effects of distance on manufacturing exports and may strengthen import specialization. R&D is found as the way to foster exports of manufacturing products from developing to developed OECD countries.

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Bibliographic Info

Article provided by University of Rijeka, Faculty of Economics in its journal Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics.

Volume (Year): 29 (2011)
Issue (Month): 1 ()
Pages: 65-88

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Handle: RePEc:rfe:zbefri:v:29:y:2011:i:1:p:65-88

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Keywords: manufacturing trade; research and development; distance; level of economic development; OECD countries; adapted gravity equation; panel data analysis;

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  1. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
  2. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
  3. BARRIOS, Salvador & GÖRG, Holger & STROBL, Eric, . "Explaining firms' export behaviour: R&D, spillovers and the destination market," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1654, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, American Economic Association, vol. 69(1), pages 106-16, March.
  5. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
  6. Ambos, Bjorn, 2005. "Foreign direct investment in industrial research and development: A study of German MNCs," Research Policy, Elsevier, Elsevier, vol. 34(4), pages 395-410, May.
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