Do R&D Investments Affect Export Performance?

Valdemar Smith (), Erik Strøjer Madsen and Mogens Dilling-Hansen
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Erik Strøjer Madsen: The Aarhus School of Business
Mogens Dilling-Hansen: School of Business Administration, University of Aarhus

No 2002-09, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: This paper analyses the role of R&D in the export behaviour of Danish firms. Export behaviour is defined as the likelihood of a firm being an exporter. In the theoretical part of the paper it is argued that export and being R&D active are endogenous with respect to each other, and an empirical model is formulated in order to estimate which factors affect the firm's export. It is argued that besides R&D, firm size, wages and a number of other firm-specific factors controlling for risks are highly important for the export performance. In the empirical part of the paper the model is tested on a sample of 3,500 Danish firms. Using a FIML estimation form in order to deal with endogeneity problems between the R&D and export decisions of the firms, the computation clearly verifies the theoretical model put forward. Moreover, R&D is an important factor for being an exporting firm.

Keywords: firm behaviour; export; R&D (search for similar items in EconPapers)
JEL-codes: L2 F14 O32 (search for similar items in EconPapers)
Date: 2002-12
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