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 Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

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: Fizzy soda water could be key to clean manufacture of flat wonder material: Graphene

Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.

As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...

Im Focus: Exotic quantum states made from light: Physicists create optical “wells” for a super-photon

Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.

Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...

Im Focus: Circular RNA linked to brain function

For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.

While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...

Im Focus: RAVAN CubeSat measures Earth's outgoing energy

An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.

The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...

Im Focus: Scientists shine new light on the “other high temperature superconductor”

A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.

Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Papers – ICNFT 2018, 5th International Conference on New Forming Technology

16.08.2017 | Event News

Sustainability is the business model of tomorrow

04.08.2017 | Event News

Clash of Realities 2017: Registration now open. International Conference at TH Köln

26.07.2017 | Event News

 
Latest News

Cholesterol-lowering drugs may fight infectious disease

22.08.2017 | Health and Medicine

Meter-sized single-crystal graphene growth becomes possible

22.08.2017 | Materials Sciences

Repairing damaged hearts with self-healing heart cells

22.08.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>