A Note on R&D and Price Elasticity of Demand
This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugmann-type setting. R&D activity is treated as a ficed cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports.
Volume (Year): 225 (2005)
Issue (Month): 6 (November)
|Contact details of provider:|| Postal: Licher Straße 74, 35394 Gießen|
Phone: +49 (0)641 99 22 001
Fax: +49 (0)641 99 22 009
Web page: http://wiwi.uni-giessen.de/home/oekonometrie/Jahrbuecher/
More information through EDIRC
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.:
- Wilson, John F & Takacs, Wendy E, 1979.
"Differential Responses to Price and Exchange Rate Influences in the Foreign Trade of Selected Industrial Countries,"
The Review of Economics and Statistics,
MIT Press, vol. 61(2), pages 267-79, May.
- John F. Wilson & Wendy E. Takacs, 1977. "Differential responses to price and exchange rate influences in the foreign trade of selected industrial countries," International Finance Discussion Papers 104, Board of Governors of the Federal Reserve System (U.S.).
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Philipp J.H. Schroeder, 2004. "Real Versus Tariff Liberalization: A Welfare Comparison Under Monopolistic Competition," Open Economies Review, Springer, vol. 15(4), pages 403-418, October.
- Rian Beise-Zee & Christian Rammer, 2006.
"Local User-Producer Interaction in Innovation and Export Performance of Firms,"
Small Business Economics,
Springer, vol. 27(2), pages 207-222, October.
- Rammer, Christian & Beise, Marian, 2003. "Local User-Producer Interaction in Innovation and Export Performance of Firms," ZEW Discussion Papers 03-51, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Schröder, Philipp J.H. & Jørgensen, Jan G., 2001. "Reductions in Real versus Tariff Barriers: The Effects on Industry Concentration," MPRA Paper 124, University Library of Munich, Germany.
- Dorothea Lucke & Philipp J. H. Schröder & Dieter Schumacher, 2004. "R&D and Price Elasticity of Demand," Discussion Papers of DIW Berlin 430, DIW Berlin, German Institute for Economic Research.
- Jan Jørgensen & Philipp Schröder, 2005. "Welfare-ranking ad valorem and specific tariffs under monopolistic competition," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 228-241, February.
- Abdelhak S. Senhadji & Claudio E. Montenegro, 1999. "Time Series Analysis of Export Demand Equations: A Cross-Country Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 46(3), pages 2.
- Benassy, Jean-Pascal, 1996. "Taste for variety and optimum production patterns in monopolistic competition," Economics Letters, Elsevier, vol. 52(1), pages 41-47, July.
- Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-25, May.
- Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:225:y:2005:i:6:p:688-698. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Winker)
If references are entirely missing, you can add them using this form.