The Dynamic Impact of Exporting on Firm R&D Investment / Florin G. Maican, Matilda Orth, Mark J. Roberts, Van Anh Vuong.

Format:

Book

Author/Creator:

Maican, Florin G.

Contributor:

National Bureau of Economic Research.

Orth, Matilda.

Roberts, Mark J.

Vuong, Van Anh.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27986.

NBER working paper series no. w27986

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

This article estimates a dynamic structural model of firm R&D investment in twelve Swedish manufacturing industries and uses it to measure rates of return to R&D and to simulate the impact of trade restrictions on the investment incentives. R&D spending is found to have a larger impact on firm productivity in the export market than in the domestic market. Export market profits are a substantial source of the expected return to R&D. Counterfactual simulations show that trade restrictions lower both the expected return to R&D and R&D investment level, thus reducing an important source of the dynamic gains from trade. A 20 percent tariff on Swedish exports reduces the expected benefits of R&D by an average of 32.2 percent and lowers the amount of R&D spending by 13.9 percent in the high-tech industries. The corresponding reductions in the low-tech industries are 30.4 and 8.9 percent, respectively. R&D adjustments in response to export tariffs mainly occur on the intensive, rather than the extensive, margin.

Notes:

Print version record

October 2020.