The Dynamic Impact of Exporting on Firm R&D Investment

Florin Maican, Matilda Orth, Mark Roberts and Van Anh Vuong
Additional contact information
Matilda Orth: Research Institute of Industrial Economics (IFN), Stockholm
Van Anh Vuong: Maastricht University

No 793, Working Papers in Economics from University of Gothenburg, Department of Economics

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 percent tariff on Swedish exports reduces the expected benefits of R&D for the median firm by 18.6 percent and lowers the amount of R&D spending by 7.6 percent in the high-tech industries. The corresponding reductions in the low-tech industries are 20.6 and 5.5 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; export; productivity (search for similar items in EconPapers)
JEL-codes: F13 L13 L60 O30 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2020-10, Revised 2022-08
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Citations: View citations in EconPapers (1)

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https://gupea.ub.gu.se/handle/2077/66798 Full text (text/html)

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 (2020)
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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