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Participation in export markets and the role of R&D: establishment-level evidence from the UK Community Innovation Survey 2005

Richard Harris () and Qian Li ()

Applied Economics, 2011, vol. 43, issue 23, 3007-3020

Abstract: There is a strong expectation in the literature that exporting and innovation activities (particularly R&D) are strongly related, and that the need to be innovative is increasing over time due to globalization. In this study, we find that R&D is endogenous in a model that determines which British establishments enter export markets, and when such simultaneity is taken into account the strength of the export-innovation relationship is generally quite weak (especially in the nonmanufacturing sector). Rather, we find that the size of establishments and firms, foreign ownership, the extent of international co-operation and, most importantly, the industry sector to which the establishment belongs, are the most significant in explaining which establishments are able to overcome entry barriers into overseas markets.

Date: 2011
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DOI: 10.1080/00036840903427190

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