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The R&D and innovation effects of firm-specific trade opportunities

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  • Videnord, Josefin

    (Tillväxtanalys)

Abstract

This paper explores how firm-specific trade opportunities affect R&D investments and innovative activities. To construct trade opportunities that are exogenous to firm-level decisions, I use the variation in export and import patterns and exploit the fact that firms differ in their product-country exporting (sourcing) patterns. Both export and import opportunities generate growth in terms of sales, value-added, overall employees, and high-skilled employees. Despite having similar effects on firm growth, the effects on innovation activities are very different for the two trade shocks. Export opportunities lead to more R&D investments (spending, employees, and intensity) and innovations (product and process). On the other hand, import opportunities show no effects on R&D investments, and the impact on product, process, and service innovation is negative.

Suggested Citation

  • Videnord, Josefin, 2025. "The R&D and innovation effects of firm-specific trade opportunities," Working Paper Series 2025:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2025_014
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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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