R and D, international sourcing, and the joint impact on firm performance
Esther Ann Boler, Andreas Moxnes and Karen Helene Ulltveit-Moe
This paper studies the impact of an R&D cost shock on R&D investments, imported inputs, and their joint impact on firm performance. We introduce imported inputs into a model of R&D and endogenous productivity, and show that R&D and international sourcing are complementary activities. Exploiting the introduction of an R&D tax credit in Norway in 2002, we find that cheaper R&D stimulated not only R&D investments but also imports of intermediates, quantitatively consistent with the model. An implication of our work is that improved access to imported inputs promotes R&D investments and, ultimately, technological change.
1 December 2015
American Economic Review 105(12) , pp.3704-3739, 2015
https://www.aeaweb.org/articles?id=10.1257/aer.20121530
This Journal article is published under the centre's Trade programme.