Cross-Industry Heterogeneity in Export Participation: The Role of Scale Economies in R&D

Arbeitspapier

This paper shows that the R&D intensity of an industry plays an important role in determining international trade patterns via its e¤ect on scale economies. I first develop a model of trade with heterogeneous firms where firms compete with each other by spending on fixed product development costs such as R&D. The model predicts that a larger share of firms are exporters in industries where R&D is a large component of total costs. The model also predicts that R&D-intense industries are less sensitive to trade costs. I find empirical support for these predictions using firm-level data for Swedish manufacturing industries. The results also highlight the importance of controlling for firm size when measuring the firm extensive margin of exports.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 930

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
• Subject: International Trade ; Trade Costs ; Endogenous Sunk Costs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ferguson, Shon
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/81347
• Last update: 10.03.2025, 11:43 AM CET