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R&D and manufacturing production specialization in developed economies

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  • Dirk Frantzen

Abstract

A study of the relation between technology and manufacturing production specialization in a series of developed economies is performed by means of models relating indicators of revealed symmetric comparative advantage of value added and exports to similar measures of comparative performance of R&D expenditure, capital intensity, total factor productivity and wage costs. The production and R&D specialization are shown to be substantial and sticky. This contrasts with the evidence of a substantial degree of convergence in the patterns of the other variables. Regression estimates show that, although all variables play their part, the impact of comparative R&D efforts on production specialization is by far the strongest. This impact is found to be stronger in the smaller economies and it is especially important in research-intensive industries. The influence of comparative wages is, moreover, found to be positive here, suggesting the dominance of a labour skill and efficiency wage effect over a wage cost competitiveness effect. These findings are shown to conform quite well with the predictions of Schumpeterian theory and of certain contributions to 'new trade theory' that have stressed the importance of dynamic economies of scale.

Suggested Citation

  • Dirk Frantzen, 2008. "R&D and manufacturing production specialization in developed economies," Applied Economics, Taylor & Francis Journals, vol. 40(23), pages 3009-3027.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:23:p:3009-3027
    DOI: 10.1080/00036840600994013
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    References listed on IDEAS

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    1. Giovanni Dosi & Keith Pavitt & Luc Soete, 1990. "The Economics of Technical Change and International Trade," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1990, November.
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    Cited by:

    1. Ioannis Bournakis & Michela Vecchi & Francesco Venturini, 2018. "Off‐Shoring, Specialization and R&D," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(1), pages 26-51, March.
    2. Luo, Zhengying & Chiu, Yung-Ho & Tang, Lingling & Xu, Yayun & Lu, Ching-Cheng, 2016. "Industrial Enterprises' Innovation Efficiency And The Influence Of Capital Source: Based On Statistical Data Of Industrial Enterprises In Jiangsu Province," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 57(2), pages 175-193, December.
    3. Chen, Jong-Rong & Chu, Yun-Peng & Ou, Yi-Pey & Yang, Chih-Hai, 2015. "R&D specialization and manufacturing productivity growth: A cross-country study," Japan and the World Economy, Elsevier, vol. 34, pages 33-43.

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