Purpose: Little attention has been paid to investigation of direct and indirect of policy and firm-specific factors on export in the renewable energy industry. To fill the gaps in the literature, this paper examines the relative importance of the effects of government supports, firm heterogeneity, and inter-firm spillovers on export.
Research design, data, and methodology: A dynamic panel model is established to investigate the relationships between the variables in question. We use the panel data for solar energy technology firms in Korea to test the relationships. We conduct various diagnostic tests to see whether first-order autocorrelation, cross-sectional dependence, homoscedasticity, and unit-root exist. Considering the results of the diagnostic tests, the empirical model is established to test the nexus between the variables, which is estimated for the full sample of the data and two sub-samples of the data over 1980-2001 and 2002-2019 period, using system generalized method of moments(GMM).
Results: For the full sample, R&D subsidy has a significant positive direct and indirect (spillover) effect on firms’ export. Non-R&D subsidy has a positive spillover effect on firms’ export, but does not directly affects. Total factor productivity has a direct and positive effect on firms’ export. Firms’ export is promoted by firm age, not inter-firm competition.
Implications: Unlike the existing literature focusing on the direct effects of policy supports on export at the industry level, this study contributes to further extending our understanding of the direct and spillover effects of policy supports and firm heterogeneity on export at the firm level. The main results of the study, and policy implications is helpful for increasing realistic policy applicability, by applying them to firms that are actual beneficiaries of public subsidy.