American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
R&D Investment, Exporting, and Productivity Dynamics
American Economic Review
vol. 101,
no. 4, June 2011
(pp. 1312–44)
Abstract
This paper estimates a dynamic structural model of a producer's decision to invest in R&D and export, allowing both choices to endogenously affect the future path of productivity. Using plant-level data for the Taiwanese electronics industry, both activities are found to have a positive effect on the plant's future productivity. This in turn drives more plants to self-select into both activities, contributing to further productivity gains. Simulations of an expansion of the export market are shown to increase both exporting and R&D investment and generate a gradual within-plant productivity improvement. (JEL D24, F14, G31, L63, O31, O33)Citation
Aw, Bee Yan, Mark J. Roberts, and Daniel Yi Xu. 2011. "R&D Investment, Exporting, and Productivity Dynamics." American Economic Review, 101 (4): 1312–44. DOI: 10.1257/aer.101.4.1312Additional Materials
JEL Classification
- D24 Production; Cost; Capital, Total Factor, and Multifactor Productivity; Capacity
- F14 Country and Industry Studies of Trade
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- L63 Microelectronics; Computers; Communications Equipment
- O31 Innovation and Invention: Processes and Incentives
- O33 Technological Change: Choices and Consequences; Diffusion Processes