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R&D Accessibility and Comparative Advantages in Quality Differentiated Goods

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  • 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.

Suggested Citation

  • Johansson, Sara, 2007. "R&D Accessibility and Comparative Advantages in Quality Differentiated Goods," Working Paper Series in Economics and Institutions of Innovation 107, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0107
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    References listed on IDEAS

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    1. Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, vol. 11(4), pages 495-511, November.
    2. Davis, Donald R., 1995. "Intra-industry trade: A Heckscher-Ohlin-Ricardo approach," Journal of International Economics, Elsevier, vol. 39(3-4), pages 201-226, November.
    3. Paul C. Cheshire & Edward J. Malecki, 2004. "Growth, development, and innovation: A look backward and forward," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 249-267, Springer.
    4. Stefano Chiarlone, 2001. "Evidence of Product Differentiation and Relative Quality in Italian Trade," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 147-168.
    5. 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.
    6. Lionel Fontagné & Michaël Freudenberg, 1997. "Intra-Industry Trade: Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center.
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    Cited by:

    1. Andersson, Martin & Johansson, Sara, 2009. "Scale and Scope - human capital and the structure of regional export flows," Working Paper Series in Economics and Institutions of Innovation 195, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Warda, Peter, 2013. "Labor Decomposition: A Firm Level Analysis on Import Quality and Labor Demand," Working Paper Series in Economics and Institutions of Innovation 322, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    3. Sara Johansson, 2014. "The influence of knowledge on firms’ export decisions," Chapters, in: Charlie Karlsson & Börje Johansson & Kiyoshi Kobayashi & Roger R. Stough (ed.), Knowledge, Innovation and Space, chapter 5, pages 103-138, Edward Elgar Publishing.
    4. Piotr Ciżkowicz & Andrzej Rzońca & Stanisław Umiński, 2013. "The determinants of regional exports in Poland -- a panel data analysis," Post-Communist Economies, Taylor & Francis Journals, vol. 25(2), pages 206-224, June.

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    More about this item

    Keywords

    Product quality; vertical differentiation; Knowledge; Accessibility; Spatial dependence; comparative advantage; technology;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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