 The Dynamic Impact of Exporting on Firm R&D InvestmentFlorin G Maican, Matilda Orth, Mark Roberts and Vuong Van Anh Journal of the European Economic Association, 2023, vol. 21, issue 4, 1318-1362 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. Export market profits are a substantial source of the expected return to R&D. R&D spending is found to have a larger impact on firm productivity in the export market than in the domestic market. 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 10% tariff on Swedish exports reduces the expected benefits of R&D for the median firm by 18.6% and lowers the amount of R&D spending by 7.6% in the high-tech industries. The corresponding reductions in the low-tech industries are 20.6% and 5.5%, respectively. R&D adjustments in response to export tariffs mainly occur on the intensive, rather than the extensive, margin. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:21:y:2023:i:4:p:1318-1362. Access Statistics for this article Journal of the European Economic Association is currently edited by Romain Wacziarg More articles in Journal of the European Economic Association from European Economic Association |
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