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Productivity effects of trade and product innovations: an empirical analysis for 13 OECD countries

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  • Frank den Butter
  • Abdessalam Es-Saghir

Abstract

This article distinguishes two sources of productivity increases, namely product/process innovations and trade innovations. An empirical analysis for 13 OECD countries shows that product/process innovations, represented by aggregated investments in Research and Development (R&D), are major determinants for productivity growth in large industrial countries, whereas trade innovations, represented by export intensity, seem to contribute most to productivity in trade-oriented economies. These trade innovations relate to the ability to reduce transaction costs so that these trading nations specialize in the organization of production in this era of globalization where the production chain is split up in more and more component parts.

Suggested Citation

  • Frank den Butter & Abdessalam Es-Saghir, 2013. "Productivity effects of trade and product innovations: an empirical analysis for 13 OECD countries," Applied Economics, Taylor & Francis Journals, vol. 45(31), pages 4412-4418, November.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:31:p:4412-4418
    DOI: 10.1080/00036846.2013.786167
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    References listed on IDEAS

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    1. Richard Baldwin, 2011. "Trade And Industrialisation After Globalisation's 2nd Unbundling: How Building And Joining A Supply Chain Are Different And Why It Matters," NBER Working Papers 17716, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Xiaoyong Dai & Liwei Cheng, 2018. "The impact of product innovation on firm-level markup and productivity: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 50(42), pages 4570-4581, September.
    2. Svetlana Balashova & Apostolos Serletis, 2021. "Oil Price Uncertainty, Globalization, and Total Factor Productivity: Evidence from the European Union," Energies, MDPI, vol. 14(12), pages 1-11, June.

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