The role of factor conditions in high-technology exports: An empirical examination

Fostering competitiveness in high-technology industries is important to national economies because high-technology industries are associated with high value-added production and high compensation levels. The results of high-technology activity diffuse to other economic sectors, leading to increased productivity and business expansion. The objective of this study is to examine the role of factor conditions (human resources and technology) in export performance in high-technology industries. So far, no empirical research has been done on the relationship between the state of factor conditions in a nation and high-technology export (HTX). The study also examines the relative importance of other variables such as inward investment, domestic rivalry (DR), home demand, and exchange rate (ER) in determining export performance in high technology. The findings are supportive of the fact that (a) the level of factor conditions in a nation is a strong predictor of export performance in high technology and (b) other variables such as inward investment, domestic rivalry (DR), and home demand also influence high-technology export (HTX). A proper understanding of this relationship will help managers and public officials to devise appropriate policies for encouraging the growth and expansion of high-technology export (HTX).