Impact of technology and physical capital on export quality

Hasan A. Faruq ()
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Hasan A. Faruq: Xavier University, USA

Journal of Developing Areas, 2010, vol. 44, issue 1, 167-186

Abstract: This paper examines why different countries export different qualities of products. While previous studies have attributed quality differences to differences in physical capital endowments, there is a dearth of empirical work focusing on the effect of technology on the quality of exports. Using data on U.S. imports from 58 countries, we analyze the impact of technology and physical capital on quality. Our findings suggest that the export of high quality differentiated goods is associated with research and development (R&D) activities and foreign direct investment (FDI). However, physical capital has no effect on quality in the technology-intensive machinery industry. These results imply that if countries are interested in increasing the quality of the goods they export, they might consider implementing policies that promote R&D activities or attract FDI.

Keywords: Bilateral Trade; Heckscher-Ohlin Model; FDI; Product Quality; R&D (search for similar items in EconPapers)
JEL-codes: F11 L15 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.44:year:2011:issue1:pp:167-186

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