Abstract
Using panel data from Korean manufacturing firms, this study empirically investigates how knowledge assets impact the relationship between exports and productivity. We consider a scenario in which firms are situated in a globally competitive, knowledge-based environment. We establish a dynamic panel vector autoregressive model by considering the outcomes of various panel framework tests. A generalized method of moments estimator is employed to test the dynamic relationships among the variables, and a post-estimation test, Granger causality test, and impulse response test are performed. Our findings indicate the existence of a learning-by-exporting effect on the enhancement of total factor productivity (TFP). The result show that TFP can be improved by interacting with exports and knowledge assets, and that firms’ knowledge assets significantly and positively affect their exports. However, industry competition, as an external force, does not contribute to boosting firms’ productivity. We highlight the importance of continuously upgrading productivity, exports, knowledge assets, and industry competition by demonstrating that the present levels of these elements serve as the main source of their own future values. Finally, the implications of our results are outlined.
Highlights
Several prominent works, such as Bernard and Jensen [1], Bernard and Wagner [2], Bernard et al [3], Wagner [4], and Bernard et al [5], argue that the learning-by-exporting (LBE) effect is a key factor that determines the relevance of exports for companies
The data cover manufacturing firms listed in the South Korean stock market—the Korea Composite Stock Price (KOSPI), Korea Securities Dealers Automated Quotation (KOSDAQ), and Korea New Exchange (KONEX)—from 1991 to 2018
We empirically explore the effect of knowledge assets on the relationship between exports and productivity using panel data for South Korean manufacturing firms listed in the South Korean stock market from 1991 to 2018
Summary
Several prominent works, such as Bernard and Jensen [1], Bernard and Wagner [2], Bernard et al [3], Wagner [4], and Bernard et al [5], argue that the learning-by-exporting (LBE) effect is a key factor that determines the relevance of exports for companies. Relational capital expenditure indicates firms’ spending on the establishment and advancement of collaboration with external partners This expenditure enables them to exchange the information and expertise required to conduct innovation activities and overcome the innovation-related risks [43], enhance their brand value and reputation by meeting customer needs and expectations, and perform various marketing activities [41,42,44]; it includes export costs, sales promotion costs, sales commissions, other selling expenses, entertainment fees, advertising costs, storage fees, sample fees, packing costs, carrying costs, overseas market development costs, and customer service costs [37,38]. Based on the hypothetical extent to which knowledge assets (as a form of firm heterogeneity) influence the relationship between exporting (activities) and productivity enhancement, as well as the methodological concerns discussed above, we perform an econometric analysis on how exporting affects productivity.
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