The Impact of R&D Activities on Exports of German Business Services Enterprises: First Evidence from a Continuous Treatment Approach
- This paper is part of the project KombiFiD – Kombinierte Firmendaten für Deutschland that is financially supported by the German Ministry for Education and Research (BMBF). It is a joint project of the Institute of Economics of Leuphana University Lueneburg, the research data centres of the German Federal Statistical Office and the statistical offices of the German federal states, the Institute of Employment Research of the Federal Employment Agency and the research department of the German Central Bank. While members of the KombiFiD-team from all institutions contributed to the construction of the data set used in this paper, we alone are responsible for the results presented here and the conclusions drawn. We thank Sanne Hiller and two anonymous referees of this journal for helpful comments on an earlier version.
This study uses newly available representative data from German business services firms and a continuous treatment approach based on the generalised propensity score to test for a causal effect of R&D activities (measured by the share of engineers and natural scientists in all employees) on the share of exports in total sales. We find evidence for a positive and statistically significant but small causal effect. This result is in line with the (non-causal) results reported in Innovation, Globalization and Firm Dynamics. Lessons for Enterprise Policy, New York, Routledge, 2014 and 137, based on regression models with and without control for unobserved time-invariant firm characteristics. The bottom line, then, is that R&D activity does matter for success of German business services firms on export markets – but not much.