Trade and Innovation in Services : Evidence from a Developing Economy
Studies on innovation and international trade have traditionally focused on manufacturing because neither was seen as important for services. Moreover, the few existing studies on services focus only on industrial countries, although in many develo...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/06/17940726/trade-innovation-services-evidence-developing-economy-trade-innovation-services-evidence-developing-economy http://hdl.handle.net/10986/15879 |
| Summary: | Studies on innovation and international
trade have traditionally focused on manufacturing because
neither was seen as important for services. Moreover, the
few existing studies on services focus only on industrial
countries, although in many developing countries services
are already the largest sector in the economy and an
important determinant of overall productivity growth. Using
a recent firm-level innovation survey for Chile to compare
the manufacturing and "tradable" services sector,
this paper reveals some novel patterns. First, although
services firms have on average a much lower propensity to
export than manufacturing firms, services exports are less
dominated by large firms and tend to be more skill intensive
than manufacturing exports. Second, services firms appear to
be as innovative as -- and in some cases more innovative
than -- manufacturing firms, in terms of both inputs and
outputs of "technological" innovative activity,
although services innovations more often take a
"non-technological" form. Third, services
exporters (like manufacturing exporters) tend to be
significantly more innovative than non-exporters, with a
wider gap for innovations close to the global technological
frontier. These findings suggest that the growing faith in
services as a source of both trade and innovative dynamism
may not be misplaced. |
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