Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28359
Authors: 
Mahagaonkar, Prashanth
Schweickert, Rainer
Chavali, Aditya S.
Year of Publication: 
2009
Series/Report no.: 
Kiel Working Paper 1531
Abstract: 
A recent literature has pointed at potential negative effects of exchange rate volatility on innovation. In this paper, we propose that there may be a direct effect as well as an indirect effect via export activity. We test these hypotheses for sectoral R&D intensities using OECD panel data for manufacturing and services sectors for 14 OECD economies and the years 1987 - 2003. We find that the direct negative effect of volatility is pronounced in manufacturing sector but is dominated by the indirect effect via the export channel. Services do not face any effects of volatility on R&D intensities. While it is not clear which channel dominates our results confirm that there is a negative volatility affect related to openness on a sectoral level.
Subjects: 
R&D intensity
Innovation
Real Exchange Rate
Volatility
Exports
OECDCountries
JEL: 
E32
F31
O32
Document Type: 
Working Paper

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