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R&D Accessibility and Comparative Advantages in Quality Differentiated Goods

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Author Info
Johansson, Sara () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
Abstract

This paper analyzes the influences of human capital and technology transfers from R&D activities on regional export specialization along the range of product quality. Previous literature on specialization and trade in quality differentiated goods concludes that the production of high quality product varieties is intensive in knowledge and R&D. This study contributes to previous research by addressing the influence of spatial knowledge flows on the observed patterns of regional quality specialization. A theoretical model of endogenous quality choice derives regional comparative advantages to the presence of external knowledge flows from R&D activities. These knowledge transfers are modeled by accessibility variables, which deduce the presence of technology transfers from R&D activities to the geographical distribution of R&D activities and the observed patterns of spatial interaction. The impacts of regional R&D accessibility on regions’ revealed comparative advantages in high quality segments are subsequently examined in a two-dimensional cross-regional regression analysis. The results of this empirical work show significant positive effects of human capital and R&D accessibility on the revealed comparative advantages in production of high quality goods in Swedish regions. The empirical analysis also provides evidences of technology spillovers from abroad, as the presence of multinational firms increases the region’s specialization in high-quality segments. These results are robust over four different specifications of above-average product qualities. However, the sizes of estimated coefficients for R&D accessibility rises slightly with the quality level considered. This suggests that technological advantages becomes of larger importance the more superior are the levels of product quality considered.

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Publisher Info
Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 107.

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Length: 26 pages
Date of creation: 11 Dec 2007
Date of revision:
Handle: RePEc:hhs:cesisp:0107

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Related research
Keywords: Product quality; vertical differentiation; Knowledge; Accessibility; Spatial dependence; comparative advantage; technology;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R32 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Other Production and Pricing Analysis

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lionel Fontagne & Michael Freudenberg, 1997. "Intra-Industry Trade : Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center. [Downloadable!]
  2. Stiglitz, Joseph E, 1987. "The Causes and Consequences of the Dependence of Quality on Price," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 1-48, March. [Downloadable!] (restricted)
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This page was last updated on 2009-11-23.


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