R&D Dynamics and Its Impact on Productivity and Export Demand in Swedish Manufacturing
Van Anh Vuong,
Florin Maican (),
Matilda Orth and
Mark Roberts ()
VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association
In this paper we develop a structural empirical model that allows us to estimate the impact of R&D on ﬁrm proﬁtability through two channels. In the ﬁrst channel, R&D investment by the ﬁrm can impact the ﬁrm's production eﬃciency and lower its marginal cost. This productivity channel raises the ﬁrm's sales and proﬁts in both the domestic and export market. The second channel is speciﬁc to exporting ﬁrms where R&D acts to increase the demand for the ﬁrm's products in foreign markets. Using micro data for Swedish manufacturing ﬁrms from 2000-2010 we estimate the impact of R&D investment on the unobserved component of the ﬁrm's productivity and export market demand. Our empirical results show that ﬁrm R&D investment has a statistically signiﬁcant, positive eﬀect on both the future productivity and the future export demand of the ﬁrm. For high-tech industries, we ﬁnd that the impact of R&D investments on the demand shocks is twice as large as its impact on productivity. On the other hand, the impact of R&D investments on productivity in the low-tech industries is higher than on demand shocks.
JEL-codes: D22 F10 L60 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145945
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