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Schumpeterian loops in international trade: the evidence of the oecd countries

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Abstract

The paper shows how and why international trade and endogenous technological change are part of a Schumpeterian loop in advanced countries. Imports stir the creative response of firms exposed to global competition and engender the introduction of productivity-enhancing innovations that are contingent upon the knowledge and competence available in each industry. The introduction of new industry-specific technologies augments both productivity and exports. The long-term empirical evidence of the manufacturing industries of 13 OECD countries from 1995 to 2015 fully confirms the Schumpeterian loop.

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Notes

  1. http://www.oecd.org/industry/ind/stanstructuralanalysisdatabase.htm

  2. The database is unbalanced because there are no data on Canada for 2015 and on R&D for 1995 and 1996 in Slovenia.

  3. The data on the R&D expenditures by industry are rare. However, we have also this information from: 2004 for the Czech Republic; 2008 for Italy and Portugal; and 2010 for Finland. Moreover, France has these data until 2013.

  4. The granularity of the industrial analysis could limit two mutually exclusive criticisms. On the one hand, a thinner industry classification considers the offshore. On the other hand, a broader industry classification allows firms to be active in multiple sectors. Given the key role of R&D in the framework, we minimize the second criticism. However, imports could be overestimated because they also consider some effect of outsourcing in the value chain.

  5. The value of capital over labor could be affected by the unity of measure used in the database. In the Appendix, we use Zuleta (2012)s procedure to solve this potential bias issue.

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Acknowledgments

We gratefully acknowledge the comments to preliminary versions of the two anonymous referees, the editor Bart Verspagen, and Marco Vivarelli as well as the funding of the research project PRIN 20177J2LS9.

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Correspondence to Cristiano Antonelli.

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Appendix

Appendix

Zuleta (2012) suggests an empirical procedure to correctly assign the unit of measurement for labor and capital. Indeed, each change in the capital over labor affects labor productivity. The magnitude of this effect depends on the abundance of capital and labor and then the inputs unit of measure could be relevant. In the following, we replicate the unit of measure suggested by the STAN database with the Zuleta (2012)‘s procedure like robustness check. Tables 6, 7, 8, 9, 10 replicate Tables 1-5 following the Zuleta (2012)‘s procedure to obtain the unbiased units of measurement of the factors. All previous results are fully supported.

Table 6 Descriptive statistics from the Zuleta (2012)‘s unity of measures
Table 7 1st step of the 3SLS from the Zuleta (2012)
Table 8 2nd step of the 3SLS from the Zuleta (2012)‘s unity of measures
Table 9 3rd step of the 3SLS from the Zuleta (2012)‘s unity of measures
Table 10 3SLS by industries from the Zuleta (2012)‘s unity of measures

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Antonelli, C., Feder, C. Schumpeterian loops in international trade: the evidence of the oecd countries. J Evol Econ 31, 799–820 (2021). https://doi.org/10.1007/s00191-021-00725-8

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