On the Link Between Innovation, Markups and Exporting
(2016) NEKN01 20161Department of Economics
- Abstract
- The relationship between innovation, markup and exporting is complex and any empirical analysis is likely to contain both self-selection and simultaneity biases. I use recently developed GMM estimation techniques to recover time-varying markups at the firm level. I then cast these into a simultaneous-equation framework to estimate the influence of R\&D investments on markups and export behavior of Swedish manufacturing firms. My analysis shows that firms can significantly improve their domestic market power through innovative investments. Moreover, a one percentage point increase in the markup gives rise to a 0.013 per cent export surge per employee on average. This confirms the hypothesis that, through innovation, firms establish domestic... (More)
- The relationship between innovation, markup and exporting is complex and any empirical analysis is likely to contain both self-selection and simultaneity biases. I use recently developed GMM estimation techniques to recover time-varying markups at the firm level. I then cast these into a simultaneous-equation framework to estimate the influence of R\&D investments on markups and export behavior of Swedish manufacturing firms. My analysis shows that firms can significantly improve their domestic market power through innovative investments. Moreover, a one percentage point increase in the markup gives rise to a 0.013 per cent export surge per employee on average. This confirms the hypothesis that, through innovation, firms establish domestic market power before turning to foreign markets. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8889678
- author
- Jägerstedt, Hannes LU
- supervisor
- organization
- course
- NEKN01 20161
- year
- 2016
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Innovation, Markups, GMM, CDM, Quality Ladders
- language
- English
- id
- 8889678
- date added to LUP
- 2016-09-09 14:05:34
- date last changed
- 2016-09-09 14:05:34
@misc{8889678, abstract = {{The relationship between innovation, markup and exporting is complex and any empirical analysis is likely to contain both self-selection and simultaneity biases. I use recently developed GMM estimation techniques to recover time-varying markups at the firm level. I then cast these into a simultaneous-equation framework to estimate the influence of R\&D investments on markups and export behavior of Swedish manufacturing firms. My analysis shows that firms can significantly improve their domestic market power through innovative investments. Moreover, a one percentage point increase in the markup gives rise to a 0.013 per cent export surge per employee on average. This confirms the hypothesis that, through innovation, firms establish domestic market power before turning to foreign markets.}}, author = {{Jägerstedt, Hannes}}, language = {{eng}}, note = {{Student Paper}}, title = {{On the Link Between Innovation, Markups and Exporting}}, year = {{2016}}, }