R&D, export and productivity: testing the Bustos model on Danish data

Abstract

In this article, a unique data set for Danish manufacturing firms has been used to analyse the interplay between export, R&D investments and productivity. In addition to traditional tests, a nonparametric test for differences in stochastic distributions gives evidence that the productivity distribution of firms that export and engage in R&D dominates the productivity distribution of firms that are exporters without engaging in R&D. Furthermore, the productivity distribution of the latter group of firms dominates that of firms who are neither R&D-active nor exporters. This conclusion applies to the years before, under and after the economic downward spiral in the world economy, i.e. 2007 to 2010. Overall, this result confirms the hypothesis of Bustos (2011) for Argentina, and for the results for German firms, see Wagner (2012b) and Vogel and Wagner (2012). However, for 2009 the findings are less clear, mainly due to the relative productivity cutback, which some exporting firms faced at the beginning of the downturn in the world economy.

Keywords:

• export
• R&D
• productivity
• firms

JEL Classification:

• D21
• F10

Notes

¹ Labour productivity is normally highly correlated to, e.g. more complete productivity measures like total factor productivity, see Wagner (2012b).

² See Kernel density plots of productivity in Annex.