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This paper examines the impact of exporting on R&D investment using firm-level data from Korean manufacturing industries. To control for the tendency of R&D intensive firms to self-select into exporting, we employ propensity score matching along with the difference-in-differences method. The analysis reveals that new exporters show a statistically significant increase in both the probability of conducting R&D investment and the R&D intensity compared to non-exporting firms. Specifically, the probability of conducting R&D investment is estimated to increase by 7-10 percentage points, and the R&D intensity by 0.2-0.3 percentage points. Notably, the effect exporting on R&D investment is greater and grow over time in larger firms, while the effect is smaller and decreases over time in smaller firms. Furthermore, the effect is more pronounced in internal R&D investments than in external R&D investments. These findings suggest that increased export opportunities induce firms to invest in innovation, with the magnitude of effects depending on firm-specific capabilities.
A Tue, study studied this question.