Determinants of high-tech export: evidence from a cross-country analysis

Abstract

Relevance. The adoption of new technologies and the rapid emergence of innovation spur high-tech production and export-led economic growth. We aim to provide fresh evidence on the determinants of high-tech exports, considering different macroeconomic factors within the framework of the gravity model. Research Objective. The aim of the research is to empirically assess the impact of macroeconomic instability, tax policies, natural resources endowment, human capital, and institutional environment on the promotion of high-tech exports. Data and Methods. In considering the institutional indicator, six distinct indices from the World Bank are examined, and a common indicator is computed using principal component analysis. The econometric modeling uses a panel dataset covering the world's 80 largest economies from 1996 to 2019. To test the assumptions of the gravity model and tackle the heteroscedasticity problem, the Poisson Pseudo Maximum Likelihood methodology is employed. Results. Higher inflation and unemployment rates are found to significantly decrease high-tech exports, while government external debt contributes to their enhancement. Tight tax policy and an increase in tax contribution are counterproductive in spurring high-tech exports. A negative and significant result is found for resource endowment, indicating that an increase in resource exports is counterproductive for technological advances and high-tech production. In most cases, the institutional environment and human capital significantly promote high-tech exports. Conclusions. Based on the presented empirical findings, we offer recommendations for the government to stimulate high-tech exports.