Exports-R&D investment complementarity and economic performance of firms located in Portugal

• Type: Article in International Scientific Journal
• Date: 2016

Authors

Neves, A (Author) Other; Aurora Teixeira (Author) FEP; Sandra, ST (Author) FEP

Journal

Title: Investigacion Economica

Vol. 75 No. 295

Pages: 125-156

ISSN: 0185-1667

Publisher: Universidad Nacional Autónoma de México

Indexing

ISI Web of Knowledge - 28 Citations

Scopus - 32 Citations

Other information

Authenticus ID: P-00K-A8W

DOI: 10.1016/j.inveco.2016.03.004

Abstract (EN): There are a vast number of studies on the relationship between R&D and exports. However, the results are not always clear-cut. This study evaluates whether, in the case of a small, open and peripheral country in which exports are the engine of economic growth despite a noticeable laggardness in terms of R&D, the firms' R&D impacts on and/or is influenced by their exports, as well as whether the interrelation between R&D and exports impacts on the performance of firms. Using an unique dataset comprising all (more than 340 thousands) non-financial companies based in Portugal, over the period 2006-2012, estimations based on bivariate probit models, which provide the simultaneous estimation of the two decisions (R&D and exports), taking into account the correlation between the estimation errors of the equations for R&D and exports, confirm there is complementarity between R&D and exports, which means that engaging in R&D activities will increase the firm's probability of engaging in export activities. Additionally, engaging in export activities will also increase the probability of engaging in R&D. The results also provide support for the hypothesis that more productive firms self-select into exporting activities and also provide support for the learning-by-exporting hypothesis. Finally, based on a panel model we further found that R&D and exports have a positive effect on sales growth, which is enhanced when both activities occur simultaneously.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 32