Strategic Exports and R&D with Internationally Mobile Skilled Labor and Exchange Rate Volatility

15 Pages Posted: 8 May 2006

See all articles by Sajal Lahiri

Sajal Lahiri

Southern Illinois University Carbondale - Department of Economics

Fernando Mesa

Departamento Nacional de Planeacion

Abstract

This paper extends the Spencer and Brander (1983) model of strategic exports and R&D by introducing exchange rate volatility and R&D activities that require internationally mobile skilled labor. We find that an increased volatility reduces both the levels of optimal export subsidy and R&D tax. We also find that the endogeneity of skilled wage increases the level of export subsidy and reduces the level of R&D tax if the country is an exporter of skilled labor.

Suggested Citation

Lahiri, Sajal and Mesa, Fernando, Strategic Exports and R&D with Internationally Mobile Skilled Labor and Exchange Rate Volatility. Review of International Economics, Vol. 14, No. 2, pp. 277-291, May 2006. Available at SSRN: https://ssrn.com/abstract=896588 or http://dx.doi.org/10.1111/j.1467-9396.2006.00575.x

Sajal Lahiri (Contact Author)

Southern Illinois University Carbondale - Department of Economics ( email )

MC 415
1000 Faner Drive
Carbondale, IL 62901
United States

Fernando Mesa

Departamento Nacional de Planeacion ( email )

Bogota
Colombia
+57 1 5999526 (Fax)

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