Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Companies that combine exports, research outperform competitors

20.06.2011
Economists recognize that companies that export are more productive. However, a more complex relationship between exporting and investing in research and development may better explain the high productivity of companies in "economic miracle" countries such as China and Taiwan, according to a team of economists.

"The old story is that there's some type of magic that makes your company more productive if it exports," said Bee-Yan Aw, professor of economics, Penn State. "Actually what we found is that really productive firms tend to export in the first place."

The researchers, who released their findings in the current issue of the American Economic Review, said companies that exported and invested in R&D significantly outperformed other companies significantly in productivity, including companies that just began exporting. They examined data on the relationship between R&D investments, exporting practices and productivity for Taiwanese electronic product manufacturing plants from 2000 to 2004.

A company that both invests in R&D and exports is 123 percent more productive than a plant that does neither, said Mark Roberts, professor of economics, Penn State. A plant that exports, but does not invest in R&D, is only 35 percent more productive. A plant that only invests in R&D has productivity that is twice as high.

According to Aw, manufacturers may be tempted to seize higher productivity gains by investing only in R&D and not in exports, but the costs of implementing new technology and updating equipment could be prohibitive.

"There are often higher costs associated with research and development that may make it impractical for companies to implement," said Aw. "Exporting may actually be a more desirable way to improve productivity initially because it is relatively low cost."

The Penn State researchers, who worked with Daniel Yi Xu, assistant professor of economics, New York University, said companies that export gain a competitive edge by learning more from their customers, which are often larger companies in Western countries.

Because companies that export are more productive, they may have a significant advantage over non-exporting firms that are hoping to sell their goods overseas. Government programs can help ease this transition for non-exporting companies that are looking for customers in foreign markets, according to Aw.

"Governments can set up programs that help non-exporting companies connect with customers in other countries," said Aw. "In fact, that's what a lot of countries are already doing."

Matt Swayne | EurekAlert!
Further information:
http://www.psu.edu

More articles from Business and Finance:

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

nachricht Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Traffic jam in empty space

New success for Konstanz physicists in studying the quantum vacuum

An important step towards a completely new experimental access to quantum physics has been made at University of Konstanz. The team of scientists headed by...

Im Focus: How gut bacteria can make us ill

HZI researchers decipher infection mechanisms of Yersinia and immune responses of the host

Yersiniae cause severe intestinal infections. Studies using Yersinia pseudotuberculosis as a model organism aim to elucidate the infection mechanisms of these...

Im Focus: Interfacial Superconductivity: Magnetic and superconducting order revealed simultaneously

Researchers from the University of Hamburg in Germany, in collaboration with colleagues from the University of Aarhus in Denmark, have synthesized a new superconducting material by growing a few layers of an antiferromagnetic transition-metal chalcogenide on a bismuth-based topological insulator, both being non-superconducting materials.

While superconductivity and magnetism are generally believed to be mutually exclusive, surprisingly, in this new material, superconducting correlations...

Im Focus: Studying fundamental particles in materials

Laser-driving of semimetals allows creating novel quasiparticle states within condensed matter systems and switching between different states on ultrafast time scales

Studying properties of fundamental particles in condensed matter systems is a promising approach to quantum field theory. Quasiparticles offer the opportunity...

Im Focus: Designing Architecture with Solar Building Envelopes

Among the general public, solar thermal energy is currently associated with dark blue, rectangular collectors on building roofs. Technologies are needed for aesthetically high quality architecture which offer the architect more room for manoeuvre when it comes to low- and plus-energy buildings. With the “ArKol” project, researchers at Fraunhofer ISE together with partners are currently developing two façade collectors for solar thermal energy generation, which permit a high degree of design flexibility: a strip collector for opaque façade sections and a solar thermal blind for transparent sections. The current state of the two developments will be presented at the BAU 2017 trade fair.

As part of the “ArKol – development of architecturally highly integrated façade collectors with heat pipes” project, Fraunhofer ISE together with its partners...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Sustainable Water use in Agriculture in Eastern Europe and Central Asia

19.01.2017 | Event News

12V, 48V, high-voltage – trends in E/E automotive architecture

10.01.2017 | Event News

2nd Conference on Non-Textual Information on 10 and 11 May 2017 in Hannover

09.01.2017 | Event News

 
Latest News

New Study Will Help Find the Best Locations for Thermal Power Stations in Iceland

19.01.2017 | Earth Sciences

Not of Divided Mind

19.01.2017 | Life Sciences

Molecule flash mob

19.01.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>