Exporting, R&D, and absorptive capacity in UK establishments

This paper models the determinants of exporting (both in termsof export propensity and export intensity), with a particularemphasis on the importance of absorptive capacity and the endogenouslink between exporting and undertaking R&D. Based on a mergeddataset of the 2001 Community Innovation Survey and the 2000Annual Respondents Database for the UK, our results suggestthat establishment size plays a fundamental role in explainingexporting. Meanwhile, alongside other factors, undertaking R&Dactivities and having greater absorptive capacity (for scientificknowledge, international co-operation, and organizational structure)significantly reduce entry barriers into export markets, havingcontrolled for self-selectivity into exporting. Nevertheless,conditional on entry into international markets, only greaterabsorptive capacity (associated with scientific knowledge) seemsto further boost export performance in such markets, whereasspending on R&D no longer has an impact on exporting behaviouronce we have taken into account its endogenous nature.