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The Dynamic Linkages Among Exports, R&D and Productivity

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  • Juan A. Máñez
  • Maria E. Rochina-Barrachina
  • Juan A. Sanchis-Llopis

Abstract

type="main" xml:id="twec12160-abs-0001"> This 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.

Suggested Citation

  • Juan A. Máñez & Maria E. Rochina-Barrachina & Juan A. Sanchis-Llopis, 2015. "The Dynamic Linkages Among Exports, R&D and Productivity," The World Economy, Wiley Blackwell, vol. 38(4), pages 583-612, April.
  • Handle: RePEc:bla:worlde:v:38:y:2015:i:4:p:583-612
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    File URL: http://hdl.handle.net/10.1111/twec.2015.38.issue-4
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