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Empirical analysis of innovation and trade in Europe: a gravity model approach

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  • Konstantin Kunze

Abstract

This paper examines the relationship between innovation and trade in Europe. Applying the gravity model R%D expenditures and patent counts, both subdivided into sectors have been used as proxies for innovation. The results imply that innovation is a significant determinant for imports and exports; however, this relationship is not significant in every sector. Furthermore, the results suggest that innovation-output, captured by the number of patents, is associated with bigger effects on trade than innovation-input, in the form of R%D expenditures. The robustness tests indicate that endogeneity does not bias the results.

Suggested Citation

  • Konstantin Kunze, 2016. "Empirical analysis of innovation and trade in Europe: a gravity model approach," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 9(3), pages 197-211.
  • Handle: RePEc:ids:ijtrgm:v:9:y:2016:i:3:p:197-211
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    Cited by:

    1. Li Liu & Jin Luo & Xin Xiao & Bisong Hu & Shuhua Qi & Hui Lin & Xiaofang Zu, 2022. "Spatio-Temporal Evolution of Urban Innovation Networks: A Case Study of the Urban Agglomeration in the Middle Reaches of the Yangtze River, China," Land, MDPI, vol. 11(5), pages 1-21, April.

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