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Imports, Exports and Domestic Innovation

Dominik Boddin

VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

Abstract: By crawling online data, I create a new long-term patenting panel dataset for Germany to identify the causal effect of trade integration with Eastern Europe and China on patenting in the period 1993-2012. I exploit the cross-regional variation in the German industry structure and use trade flows to other advanced economies as instruments for regional import and export exposure. I find that an increase in the net trade exposure (defined as import- minus export exposure) causes an increase in regional patenting. This effect is purely driven by a positive link between import exposure and innovation, whereas export exposure does not influence innovation. Interestingly, the effects are heterogeneous across exposure origin. The positive link between import exposure and innovation is fully explained by trade integration with Eastern Europe. Increasing integration with China has no effects on innovation.

JEL-codes: F14 O30 R11 R12 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-geo, nep-ino, nep-int, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc18:181640

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