The Dynamic Impact of Exporting on Firm R&D Investment

Florin Maican, Matilda Orth, Mark Roberts and Van Anh Vuong

No 15369, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This article estimates a dynamic structural model of firm R&D investment in twelve Swedish manufacturing industries and uses it to measure rates of return to R&D and to simulate the impact of trade restrictions on the investment incentives. R&D spending is found to have a larger impact on firm productivity in the export market than in the domestic market. Export market profits are a substantial source of the expected return to R&D. Counterfactual simulations show that trade restrictions lower both the expected return to R&D and R&D investment level, thus reducing an important source of the dynamic gains from trade. A 20 percent tariff on Swedish exports reduces the expected benefits of R&D by an average of 32.2 percent and lowers the amount of R&D spending by 13.9 percent in the high-tech industries. The corresponding reductions in the low-tech industries are 30.4 and 8.9 percent, respectively. R&D adjustments in response to export tariffs mainly occur on the intensive, rather than the extensive, margin.

Keywords: R&d; Innovation; Trade; Productivity; Export (search for similar items in EconPapers)
JEL-codes: F13 L13 L6 O3 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The Dynamic Impact of Exporting on Firm R&D Investment (2023)
Working Paper: The Dynamic Impact of Exporting on Firm R&D Investment (2022)
Working Paper: The Dynamic Impact of Exporting on Firm R&D Investment (2020)
Working Paper: The Dynamic Impact of Exporting on Firm R&D Investment (2020)
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