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FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia

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Author Info
Wignaraja, Ganeshan () (Office of Regional Economic Integration, Asian Development Bank)

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Abstract

This paper examines the links between ownership, innovation and exporting in electronics firms in three late industrializing East Asian countries (China, Thailand and the Philippines) drawing on recent developments in applied international trade and innovation and learning. Technology-based approaches to trade offer a plausible explanation for firm-level exporting behavior. The econometric results (using probit) confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics. Higher levels of skills, managers' education and capital also matter in China as well as accumulated experience in Thailand. Furthermore, a technology index composed of technical functions performed by firms emerges as a more robust indicator of innovation than the R&D to sales ratio. Accordingly, technological effort in electronics in these countries mostly focuses on assimilating and using imported technologies rather than formal R&D by specialized engineers.

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Publisher Info
Paper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number 061.

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Date of creation: 2008
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Handle: RePEc:dgr:unumer:2008061

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Web page: http://www.merit.unu.edu

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Related research
Keywords: foreign direct investment; innovation; technological capabilities; R&D; firm-level exports; electronics; East Asia; China; Thailand and the Philippines;

Find related papers by JEL classification:
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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  1. Bleaney, Michael & Wakelin, Katherine, 2002. " Efficiency, Innovation and Exports," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(1), pages 3-15, February. [Downloadable!] (restricted)
  2. Correa, Paulo & Dayoub, Mariam & Francisco, Manuela, 2007. "Identifying supply-side constraints to export performance in Ecuador : an exercise with Investment Climate Survey data," Policy Research Working Paper Series 4179, The World Bank. [Downloadable!]
  3. Sanjaya Lall, 1986. "Technological development and export performance in LDCs: Leading engineering and chemical firms in India," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 122(1), pages 80-92, March. [Downloadable!] (restricted)
  4. Salvador Barrios & Holger Goerg & Eric Strobl, 2003. "Explaining Firms' Export Behaviour: R&D, Spillovers and the Destination Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 475-496, 09. [Downloadable!] (restricted)
  5. Wignaraja, Ganeshan, 2008. "Foreign ownership, technological capabilities and clothing exports in Sri Lanka," Journal of Asian Economics, Elsevier, vol. 19(1), pages 29-39, February. [Downloadable!] (restricted)
  6. Soete, Luc & Freeman, Chris, 2007. "Developing science, technology and innovation indicators: what we can learn from the past," UNU-MERIT Working Paper Series 001, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
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  7. Jun Du & Sourafel Girma, 2007. "Finance and Firm Export in China," Kyklos, Blackwell Publishing, vol. 60(1), pages 37-54, 02. [Downloadable!] (restricted)
  8. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February. [Downloadable!] (restricted)
  9. Ganeshan Wignaraja, 2002. "Firm Size, Technological Capabilities and Market-oriented Policies in Mauritius," Oxford Development Studies, Taylor and Francis Journals, vol. 30(1), pages 87-104. [Downloadable!] (restricted)
    Other versions:
  10. Dijk, van M., 2001. "The Determinants of Export Performance in Developing Countries: The Case of Indonesian Manufacturing," ECIS Working Papers 02.01, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology. [Downloadable!]
  11. Rasiah, Rajah, 2003. "Foreign ownership, technology and electronics exports from Malaysia and Thailand," Journal of Asian Economics, Elsevier, vol. 14(5), pages 785-811, October. [Downloadable!] (restricted)
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