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 language | English (US) |
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Pages (from-to) | 1312-1344 |
Number of pages | 33 |
Journal | American Economic Review |
Volume | 101 |
Issue number | 4 |
DOIs | |
State | Published - Jun 2011 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics