R&D investment, exporting, and productivity dynamics

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244 Scopus citations

Abstract

This paper estimates a dynamic structural model of a producer's decision to invest in R&D and export, allowing both choices to endogenously affect the future path of productivity. Using plant-level data for the Taiwanese electronics industry, both activities are found to have a positive effect on the plant's future productivity. This in turn drives more plants to self-select into both activities, contributing to further productivity gains. Simulations of an expansion of the export market are shown to increase both exporting and R&D investment and generate a gradual within-plant productivity improvement.

Original languageEnglish (US)
Pages (from-to)1312-1344
Number of pages33
JournalAmerican Economic Review
Volume101
Issue number4
DOIs
StatePublished - Jun 2011

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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