Heterogeneous effects of internal and external R&D on export performance by industry technology level

Using a firm-level panel dataset of South Korean manufacturing industries, this study examines the relationship between external research and development (R&D) outsourcing and internal R&D on firms’ export performance, with a focus on technological heterogeneity. The results show that R&D outsourcing and in-house R&D are complementary in high-technology industries, exerting a positive and statistically significant effect on export intensity. In contrast, in medium- and low-technology industries, the two activities appear to be substitutive, implying a negative effect on export intensity, though the relationship is not statistically significant. Notably, such heterogeneous relationships are not observed for firms’ export participation. This pattern suggests that synergistic use of internal and external R&D is not a key determinant of export entry but becomes crucial once firms compete internationally. By leveraging external R&D to enhance the effectiveness of internal capabilities, firms can upgrade products and secure greater market shares. These findings underscore the need for industry-specific R&D support policies and differentiated approaches tailored to technological intensity, enabling firms to optimize their innovation strategies and strengthen their competitiveness in global markets.