R&D Expenditures and Geographical Sales Diversification
نویسندگان
چکیده
This paper empirically examines the role of diversification in export markets on firm-level R&D activities taking account of the potential endogeneity in this relationship. We show that geographical sales diversification across different regions of the world induces UK firms to increase their R&D expenditures, as firms must innovate and develop new products to maintain a competitive edge over their rivals. This finding is robust to a battery of sensitivity checks. Furthermore, we find no evidence of reverse causality between R&D and sales diversification. (JEL Classification Numbers: G31, G32, C24)
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