The Complementary Effect Of Exporting, Importing And R&D On Productivity Of Ukrainian Firms

Recent empirical studies show that firms that simultaneously engage in export/import and internal R&D activities experience stronger productivity benefits with respect to their domestically oriented counterparts. This analysis extends the scope of these studies to explore complementary effects on productivity of engaging in all three activities (i.e. import, export and internal R&D) simultaneously in the context of emerging market firms. The results indicate that emerging markets firms benefit from complementarities stemming from the assimilation and integration of knowledge from external sources (import and export) with internal knowledge (own R&D investment). The effect is more pronounced for private enterprises, especially when they trade with partners from advanced markets.