Abstract
This paper uses a panel dataset from 1980 to 2008 to examine the determinants of high-technology exports. This research finds evidence that human capital, inflows of foreign direct investments, and openness to international trade are the major factors impacting the performance of a country's high-tech industry in the global market. It also shows that institutions do not have a direct impact on high-tech exports. However, institutions might impact high-tech exports indirectly via their effect on proximate factors such as human capital and inflows of foreign direct investments. This paper also demonstrates that gross capital formation, savings, and macroeconomic volatility have no significant effect on high-tech exports.
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Notes
According to the World Bank’s definition, high-technology goods are products with high R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery.
See Eaton and Kortum (2001) for details regarding this specification.
R&D investment is an obvious regressor in this equation. However, there are major data limitations (e.g. missing data) in the R&D investment data provided by the World Bank, preventing the use of R&D investment in this study. Nevertheless, R&D investment is highly correlated with human capital, so any bias due to the omission of R&D investment is minimizes by including human capital in the set of regressors.
See Table 1 for a complete list of the variables used in this study.
Political institutions are treated as exogenous. However, a more robust approach would treat institutions as a endogenous variable and, consequently, deal with potential endogeneity.
The coefficient on political institutions is also statistically insignificant in several other specifications not reported in the paper.
Unaccounted endogencity might be driving this result. So, further investigation on the relationship between institutions and high-tech exports might be necessary.
The coefficients on openness are marginally significant.
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Tebaldi, E. The Determinants of High-Technology Exports: A Panel Data Analysis. Atl Econ J 39, 343–353 (2011). https://doi.org/10.1007/s11293-011-9288-9
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DOI: https://doi.org/10.1007/s11293-011-9288-9