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Abstract

This thesis consists of three independent chapters contributing to the literature on international trade, technology adoption and innovation. In Chapter 1, I construct a novel bilateral dataset of trade in services differentiating between final consumption and intermediate consumption. Then, I estimate a gravity model of trade in intermediate and final services for a sample of 48 economies between 2010-2019. I show that intermediate services tend to be more sensitive to distance relative to final services due to the distinct nature of these services. Chapter 2, which is co-authored, focuses on how firm-level spending on research and development (R&D) affects the adoption of Fourth Industrial Revolution (4IR) technologies in South Korea. We propose an instrumental variable (IV) approach based on “election closeness” to address endogeneity concerns and find that an increase in R&D intensity increases the likelihood of adopting digital technologies but has no statistically significant effect on the likelihood of adopting automation technologies. In Chapter 3, I estimate a three-stage structural model of how foreign linkages affect innovation which in turn affects firm productivity using firm-level data from the World Bank Enterprise Surveys for 47 developing countries between 2003-2019. I find that while increases in R&D intensity increase the likelihood of product innovation, they have no statistically significant effect on the likelihood of process innovation. Additionally, I find that undertaking product or process innovation is associated with increases in firm-level productivity.

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