Abstract:
In more recent years, it has become increasingly recognized that R&D (research and development) is a key driver of economic growth, a source of innovation and change, and as such stimulates improvements in productivity and economic competitiveness. It is closely associated with knowledge and flexibility, two factors that have gained new significance as a source of competitiveness in an increasingly globalized world economy. In this paper the relationship between bilateral trade and R&D differences among selected east and west Asian countries is investigated, specifying a semi-parametric gravity model over 1990-2013. Despite the majority of empirical analysis, we explore the relationship between trade and R&D differences through a nonparametric analysis. The results confirm that there is a nonparametric relationship between bilateral exports and R&D differences for both. The implication is that countries with various levels of R&D activities, namely arising from entrepreneurial activities, can affect widely and substantially international trade flows.
Machine summary:
"The Role of R&D in Trade Expansion: A Semi-parametric Gravity Specification for East and West Asia 1 Sepideh Ohadi Esfahani Department of Economics, University of Isfahan, Isfahan, Iran Seyed Komail Tayebi 2 Department of Economics, University of Isfahan, Isfahan, Iran Abstract In more recent years, it has become increasingly recognized that R&D (research and development) is a key driver of economic growth, a source of innovation and change, and as such stimulates improvements in productivity and economic competitiveness.
In this paper the relationship between bilateral trade and R&D differences among selected east and west Asian countries is investigated, specifying a semi-parametric gravity model over 1990-2013.
Keywords: Research and Development (R&D), Trade, Gravity Model, Semi-parametric Analysis, East-West Asia JEL Classification: C14, F15, O30 The authors acknowledge the support of the Center of Excellence for International Economics, University of Isfahan (CEIEUI), Isfahan, Iran.
Hence the objective of this paper is to examine relationship between R&D and bilateral trade flows among selected west and East Asian countries 1 through specifying a semi-parametric gravity model.
1 To specify a new form of trade gravity model, we mainly use the semi-parametric approach to explore a nonparametric relationship between bilateral exports and technological distance.
Each table has two parts: Part A indicates parametric estimates for the gravity model; and Part B represents non-parametric relationship between bilateral trade flows and R&D differences, which is displayed by a shaded area around the curve of the dependent variable fitted values.
In this paper the relationship between bilateral trade and technological distance has been investigated by estimating a semi-parametric gravity model for the selected Asian countries over 1996-2013."