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Firm's Choice between Export and R&D and its Effect on the Firm's Productivity and Survival

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  • Aw
  • Song

Abstract

This paper examines the nature and process of technology upgrade among firms in South Korea and the underlying productivity dynamics by using micro panel data. In this paper, we see important aspects of the firm's behaviour on improving its productivity through internal and external knowledge creation activities represented by research and development (R&D) and export, respectively. Our results indicate that the level of a firm's productivity plays an important role in determining its decision on R&D investment and export. In addition, a firm's experiences involved exporting and/or investment in R&D increase the probability of its current decision on export and/or R&D investment. Firms that either export or invest in R&D show significantly high productivity level than other firms that do not involve in any of two activities. Furthermore, firms that export and invest in R&D simultaneously are more likely to have higher productivity than firms that only participate in one of two activities. These findings are consistent with the hypothesis of compounding effects of two types of knowledge creations, R&D and export.

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  • Aw & Song, 2013. "Firm's Choice between Export and R&D and its Effect on the Firm's Productivity and Survival," Global Economic Review, Taylor & Francis Journals, vol. 42(3), pages 291-310, September.
    • Handle: RePEc:taf:glecrv:v:42:y:2013:i:3:p:291-310
    DOI: 10.1080/1226508X.2013.833848
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    Cited by:

    1. Backhoon Song, 2015. "Location Proximity and Productivity Spillovers: The Case of Korean Manufacturing Plants," Asian Economic Papers, MIT Press, vol. 14(1), pages 104-118, Winter/Sp.
    2. Tommaso Ciarli & Alex Coad & Alessio Moneta, 2019. "Exporting and productivity as part of the growth process: Causal evidence from a data-driven structural VAR," LEM Papers Series 2019/39, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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