Firm's Choice between Export and R&D and its Effect on the Firm's Productivity and Survival

Bee Yan Aw, Backhoon Song

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

This paper examines the nature and process of technology upgrade among firms in South Korea and the underlying productivity dynamics by using micro panel data. In this paper, we see important aspects of the firm's behaviour on improving its productivity through internal and external knowledge creation activities represented by research and development (R&D) and export, respectively. Our results indicate that the level of a firm's productivity plays an important role in determining its decision on R&D investment and export. In addition, a firm's experiences involved exporting and/or investment in R&D increase the probability of its current decision on export and/or R&D investment. Firms that either export or invest in R&D show significantly high productivity level than other firms that do not involve in any of two activities. Furthermore, firms that export and invest in R&D simultaneously are more likely to have higher productivity than firms that only participate in one of two activities. These findings are consistent with the hypothesis of compounding effects of two types of knowledge creations, R&D and export.

Original languageEnglish (US)
Pages (from-to)291-310
Number of pages20
JournalGlobal Economic Review
Volume42
Issue number3
DOIs
StatePublished - Sep 1 2013

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics, Econometrics and Finance(all)
  • Political Science and International Relations

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