Export market participation, investments in R&D and worker training, and the evolution of firm productivity

Research output: Contribution to journalArticle

153 Citations (Scopus)

Abstract

This paper uses micro panel data for firms in the Taiwanese electronics industry in 1986, 1991 and 1996 to investigate a firm's decision to invest in two sources of knowledge - participation in the export market and investments in R&D and/or worker training - and assess their effect on the firm's future productivity. The firm's decisions to export and invest in R&D and/or worker training are modelled with a bivariate probit model that recognises the interdependence of the decisions. The effect of these investments on the firm's future productivity trajectory is then modelled while controlling for the selection bias introduced by endo-genous firm exit. The findings indicate a significant interaction effect between exporting and R&D investments and future productivity, after controlling for size, age and current productivity. Firms that undertake both investment activities have significantly higher future productivity than firms that do one or neither. In addition, these firms are more likely to continue investing in these activities leading to further productivity gains. These findings are consistent with the hypothesis that export experience is an important source of productivity growth for Taiwanese firms and that firm investments in R&D and worker training facilitate their ability to benefit from their exposure to the export market.

Original languageEnglish (US)
Pages (from-to)83-104
Number of pages22
JournalWorld Economy
Volume30
Issue number1
DOIs
StatePublished - Jan 1 2007

Fingerprint

productivity
firm
worker
participation
market
Firm productivity
Market participation
Workers
Export markets
electronics industry
Productivity
interdependence
ability
trend
interaction

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

Cite this

@article{5c2826146f9c47379611b181b386dfb6,
title = "Export market participation, investments in R&D and worker training, and the evolution of firm productivity",
abstract = "This paper uses micro panel data for firms in the Taiwanese electronics industry in 1986, 1991 and 1996 to investigate a firm's decision to invest in two sources of knowledge - participation in the export market and investments in R&D and/or worker training - and assess their effect on the firm's future productivity. The firm's decisions to export and invest in R&D and/or worker training are modelled with a bivariate probit model that recognises the interdependence of the decisions. The effect of these investments on the firm's future productivity trajectory is then modelled while controlling for the selection bias introduced by endo-genous firm exit. The findings indicate a significant interaction effect between exporting and R&D investments and future productivity, after controlling for size, age and current productivity. Firms that undertake both investment activities have significantly higher future productivity than firms that do one or neither. In addition, these firms are more likely to continue investing in these activities leading to further productivity gains. These findings are consistent with the hypothesis that export experience is an important source of productivity growth for Taiwanese firms and that firm investments in R&D and worker training facilitate their ability to benefit from their exposure to the export market.",
author = "Roberts, {Bee Yan} and Roberts, {Mark John} and Tor Winston",
year = "2007",
month = "1",
day = "1",
doi = "10.1111/j.1467-9701.2007.00873.x",
language = "English (US)",
volume = "30",
pages = "83--104",
journal = "World Economy",
issn = "0378-5920",
publisher = "Wiley-Blackwell",
number = "1",

}

Export market participation, investments in R&D and worker training, and the evolution of firm productivity. / Roberts, Bee Yan; Roberts, Mark John; Winston, Tor.

In: World Economy, Vol. 30, No. 1, 01.01.2007, p. 83-104.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Export market participation, investments in R&D and worker training, and the evolution of firm productivity

AU - Roberts, Bee Yan

AU - Roberts, Mark John

AU - Winston, Tor

PY - 2007/1/1

Y1 - 2007/1/1

N2 - This paper uses micro panel data for firms in the Taiwanese electronics industry in 1986, 1991 and 1996 to investigate a firm's decision to invest in two sources of knowledge - participation in the export market and investments in R&D and/or worker training - and assess their effect on the firm's future productivity. The firm's decisions to export and invest in R&D and/or worker training are modelled with a bivariate probit model that recognises the interdependence of the decisions. The effect of these investments on the firm's future productivity trajectory is then modelled while controlling for the selection bias introduced by endo-genous firm exit. The findings indicate a significant interaction effect between exporting and R&D investments and future productivity, after controlling for size, age and current productivity. Firms that undertake both investment activities have significantly higher future productivity than firms that do one or neither. In addition, these firms are more likely to continue investing in these activities leading to further productivity gains. These findings are consistent with the hypothesis that export experience is an important source of productivity growth for Taiwanese firms and that firm investments in R&D and worker training facilitate their ability to benefit from their exposure to the export market.

AB - This paper uses micro panel data for firms in the Taiwanese electronics industry in 1986, 1991 and 1996 to investigate a firm's decision to invest in two sources of knowledge - participation in the export market and investments in R&D and/or worker training - and assess their effect on the firm's future productivity. The firm's decisions to export and invest in R&D and/or worker training are modelled with a bivariate probit model that recognises the interdependence of the decisions. The effect of these investments on the firm's future productivity trajectory is then modelled while controlling for the selection bias introduced by endo-genous firm exit. The findings indicate a significant interaction effect between exporting and R&D investments and future productivity, after controlling for size, age and current productivity. Firms that undertake both investment activities have significantly higher future productivity than firms that do one or neither. In addition, these firms are more likely to continue investing in these activities leading to further productivity gains. These findings are consistent with the hypothesis that export experience is an important source of productivity growth for Taiwanese firms and that firm investments in R&D and worker training facilitate their ability to benefit from their exposure to the export market.

UR - http://www.scopus.com/inward/record.url?scp=33846343581&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33846343581&partnerID=8YFLogxK

U2 - 10.1111/j.1467-9701.2007.00873.x

DO - 10.1111/j.1467-9701.2007.00873.x

M3 - Article

AN - SCOPUS:33846343581

VL - 30

SP - 83

EP - 104

JO - World Economy

JF - World Economy

SN - 0378-5920

IS - 1

ER -