The dynamic linkages among exports, R&D and productivity
AbstractThis paper estimates a dynamic model of a firm’s decision to export and invest in R&D, in which we allow past export and R&D experience to endogenously affect productivity. In our empirical strategy we proceed in two steps: in the first step, using as starting point the traditional control approach method to estimate total factor productivity, we consider a more general process driving the law of motion of productivity in which we recognise the potential role that export and R&D experience might have in shaping future firms’ productivity, and test whether this assumption holds; in the second step, we estimate a bivariate dynamic model of the firm’s decision to invest in R&D and export, in which we analyse the linkages among investing in R&D, exporting and productivity. Using a representative sample of Spanish manufacturing firms for the period 1990- 2009 we find that both export and R&D positively affect future productivity, which will drive more firms to self-select in those activities.
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Bibliographic InfoPaper provided by Department of Applied Economics II, Universidad de Valencia in its series Working Papers with number 1308.
Length: 38 pages
Date of creation: Mar 2013
Date of revision:
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export experience; R&D experience; endogenous Markov; Total Factor Productivity; learning-by-exporting; returns to innovation; GMM; dynamic bivariate probit;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
- NEP-CSE-2013-03-16 (Economics of Strategic Management)
- NEP-EFF-2013-03-16 (Efficiency & Productivity)
- NEP-INO-2013-03-16 (Innovation)
- NEP-INT-2013-03-16 (International Trade)
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