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Ping-Lung Hsin, Tobias Haepp and Yen-Lien Kuo
''Export destinations, and company investments in R&D and capital.''
( 2013, Vol. 33 No.4 )
We empirically analyze the role of different export destinations in the interrelationship between exporting and investments in R&D and fixed capital at the firm level. We employ a simultaneous equation multivariate Tobit model to account for censoring, interdependence, and endogeneity of our dependent variables. Our findings show that exports to high-income economies raise subsequent investments in R&D but reduce subsequent capital investments, while exporting to other destinations triggers an increase in capital investments without significant effects on R&D. This shows that only exporting to high-income destinations provides additional incentives for product quality upgrading, while other exports correlate with the generation of economies of scale.
Keywords: Exporting, R&D, capital investment, innovation, learning effects
JEL: F1 - Trade: General
F2 - International Factor Movements and International Business: General
Manuscript Received : Sep 09 2013 Manuscript Accepted : Dec 03 2013

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