Export destinations, and company investments in R&D and capital

Ping-Lung Hsin (), Tobias Haepp () and Yen-Lien Kuo ()
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Ping-Lung Hsin: Graduate Institute of National Development, National Taiwan University
Tobias Haepp: Graduate Institute of National Development, NTU & Chung-Hua Institution for Economic Research
Yen-Lien Kuo: Department of Economics and Graduate Institute of Political Economy, National Cheng Kung University

Economics Bulletin, 2013, vol. 33, issue 4, 2851-2859

Abstract: We empirically analyze the role of different export destinations in the interrelationship between exporting and investments in R&D and fixed capital at the firm level. We employ a simultaneous equation multivariate Tobit model to account for censoring, interdependence, and endogeneity of our dependent variables. Our findings show that exports to high-income economies raise subsequent investments in R&D but reduce subsequent capital investments, while exporting to other destinations triggers an increase in capital investments without significant effects on R&D. This shows that only exporting to high-income destinations provides additional incentives for product quality upgrading, while other exports correlate with the generation of economies of scale.

Keywords: Exporting; R&D; capital investment; innovation; learning effects (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
Date: 2013-12-03
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