External R&D, productivity, and export: evidence from Japanese firms

• Published in: Review of world economics Vol. 152; no. 3; pp. 577 - 596
• Main Authors: Ito, Banri, Tanaka, Ayumu
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer 01.08.2016; Springer Berlin Heidelberg; Springer Nature B.V
• Subjects: Costs; Data analysis; Domestic markets; Economic models; Economic Policy; Economic statistics; Economic theory; Economics; Economics and Finance; Elasticity of demand; European Integration; Exports; Exports and imports; Global economy; Heterogeneity; Innovations; International Economics; International trade; Macroeconomics/Monetary Economics//Financial Economics; Original Paper; Outsourcing; Production costs; Productivity; R&D; Research & development; Studies; Japan; Productivity; R&D; Firm heterogeneity; F12; Nonparametric tests; F14; O32
• ISSN: 1610-2878; 1610-2886
• DOI: 10.1007/s10290-015-0240-y

This study theoretically and empirically examines the productivity sorting pattern of the joint decisions related to research and development (R&D) strategies and exporting status using a simple theoretical framework that extends the firm heterogeneity model to account for both internal (a firm's own R&D) and external (outsourcing R&D or technology purchase) R&D strategies. The empirical results from the nonparametric and semiparametric methods using Japanese firm-level data show that exporting firms engaged in R&D activities are more productive than non-exporters and exporters with no R&D, regardless of whether internal or external R&D strategy is adopted; further, exporters that employ both the R&D strategies are the most productive. The results suggest that the external R&D strategy is complementary to the in-house R&D strategy and is crucial for promoting the innovations of internationalized firms.