Firm R&D Investment and Export Market Exposure

Van Anh Vuong, University of Cologne

In this paper we estimate a dynamic structural model of firm's decision to invest in R&D and use it to measure the expected long-run benefit from R&D investment.
We apply the model to German firms in five high-tech manufacturing industries and distinguish firms by whether they sell purely in the domestic market or also export some of their production.
We find that R&D investment leads to a higher rate of product and process innovation among exporting …firms and these innovations have a larger impact on productivity improvement
in export market sales. As a result, exporting firms have a higher payoff from R&D investment, invest more frequently in R&D than firms that only sell in the domestic market,
and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance
of …firms that differ in their export market exposure.

About the speaker
Van Anh Vuong has been assistant professor for applied microeconomics at the University of Cologne and an affiliated researcher at the Institute of Energy Economics at the University of Cologne since 2012. She I got her Ph.D. in economics from The Pennsylvania State University after receiving her master's degree in economics from the Freie Universität Berlin. Her research interests include applied microeconomics and empirical industrial organization, in particular innovation economics and firm entry and exit decisions.

Date: 05 March 2015

Time: 12:30 - 13:30  CET