How Does an Industry Thrive More From Exporting? A Theoretical Analysis of the Learning-by-Exporting Effect with Innovation and Asymmetric DemandJournal of Finance and Economics (2014)
This paper empirically studies the learning-by-exporting hypothesis through the channel of innovation. On the one hand, due to its exports, a sector’s productivity rises to a higher level because of its accessto a wider market, as well as being introduced to intense global competition. This process is known as the“learning by exporting” theory. On the other hand, innovation can create a beneficial environment for industries orplants to grow, and therefore enhance the productivity even further. Hence the productivity gain conditional on theexports can be enlarged by fortified innovation effort. I estimate sectoral productivity using the Olley-Pakes methodology. Based on the industry-level data of US manufacturers from 2005 to 2009, I find that higher values of R&D input do have a positive effect on sectoral productivity improvement conditional on exports. Specifically,the R&D employment ratio should be higher than 6%, while the company-performed R&D funds should be at least 5%; otherwise a sector’s exports cannot improve its productivity significantly.
Citation InformationResearch in International Trade. "How Does an Industry Thrive More From Exporting? A Theoretical Analysis of the Learning-by-Exporting Effect with Innovation and Asymmetric Demand" Journal of Finance and Economics Vol. 2 Iss. 2 (2014) p. 50 - 57
Available at: http://works.bepress.com/researchin-internationaltrade/13/