Innovation, Exports and Productivity: Learning and Self selection in Chile

Claudio Bravo Ortega
Jose Miguel Benavente
Álvaro González
Documento de Trabajo del Departamento de Economía, Universidad de Chile
2012
December
Number: 
371

Abstract

Since long ago economists have shown that research and development (R&D) and business innovation are key factors for the growth of firms and the development of the economies. There is also some consensus that greater degrees of trade openness are beneficial for the long-term growth of countries. Nonetheless, there is still no evidence on the combined impact of both factors even though the link between them seem of particular relevance, especially for developing countries. This article examines the relationship between productivity, expenditure in R&D and exports at a plant level for the case of Chile. The main results show that firms that actually spend on R&D are considerably more likely to export but the reverse is not true. Moreover, we observe that both R&D and exports have a joint effect on the improvement in productivity in the Chilean plants. These results allow us to recover the private return to R&D and to learning by exporting across different sectors.