The Determinants of High-Technology Exports: A Panel Data Analysis

By Tebaldi, Edinaldo | Atlantic Economic Journal, December 2011 | Go to article overview
Save to active project

The Determinants of High-Technology Exports: A Panel Data Analysis

Tebaldi, Edinaldo, Atlantic Economic Journal


Export promotion has occupied a central role in the economic growth strategies of many countries since the 1960s, as export growth has been associated with faster productivity and GDP growth (Bernard and Jensen 2004; Madsen 2009). The analysis of exports growth and its overall economic effects has also been a significant topic in the economic literature over the last decades. However, more recently, the focus has turned to high-technology trade, as researchers endeavor to understand the links among innovation, high-tech international trade and overall economic performance (Eaton and Kortum 2001; Spulber 2008; Zhang 2007; Falk 2009).

This growing interest is mostly due to the fact that international trade of hightechnology goods (1) provides information about the overall competitiveness and position of an economy within the technology global market. It also contributes to the understanding of how innovation affects comparative advantages on a dynamic economic environment and of the relative importance of high-technology on the international marketplace. For instance, Falk (2009) shows that the share of hightech exports significantly impacts GDP growth.

However, the literature on examining the determinants of high-tech exports is still thin. Zhang (2007), Srholec (2007), and Braunerhjelm and Thulin (2008) are among the few studies that empirically analyze the determinants of high-tech exports. Zhang (2007) finds that inflows of foreign direct investments and infrastructure are significant factors in explaining high-tech exports. However, Zhang (2007)'s empirical analysis is subject to major specification and endogeneity issues that usually plague OLS estimates. Srholec (2007) estimates a parsimonious model and shows that a country's technological capabilities--measured by enrollment in higher education, granted patents and access to computer--has a positive and significant impact on high-tech exports. He also shows that the size of the economy plays an important role in determining high-tech exports. Braunerhjelm and Thulin (2008) find that R&D investment is a key factor in determining high-tech exports across OECD countries, while market size does not exert any influence on high-tech trade.

The studies listed above shed light on important issues related to high-tech exports, but questions like the following are still open to debate: does openness impact high-tech exports? Is human capital a major source of comparative advantage in the global hightech market? Does capital abundance impact high-tech trade flows'? What is the role of institutions in explaining high-tech exports'? This paper aims to contribute to the understanding of these questions by developing a simple theoretical framework linking high-tech exports to its proximate determinants and by using panel data econometrics to identify the major factors influencing high-tech exports. Regression analysis is performed using a panel data set from 1980 to 2008 compiled using data from the World Bank World Development Indicators (WDI), Barro and Lee (2010), and Polity 1V Project.

The rest of the paper is organized as follows: Theoretical Framework presents a simple theoretical model linking high-tech exports to human capital, technology, and institutions. Empirical Model discusses the methodology, the data and the empirical model. Results reports the results of the empirical analysis, and Final Remarks summarizes the findings of the paper.

Theoretical Framework

The model below is motivated by a growing branch of theoretical research that considers the relationship between innovation and international trade. This paper follows Eaton and Kortum (2001) and assumes that the world economy is comprised of N countries and each country i produces a vector of high-tech goods j [member of] [0, 1] using human capital and technology given by h,(/). This implies that h(j) represents labor productivity or alternatively the quality of good j produced in country i.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

The Determinants of High-Technology Exports: A Panel Data Analysis


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?