Services vs. Manufacturing – How Does Foreign and Domestic Sales Impact on Their R&D?

Research output: Contribution to journalArticle


While the distinction between manufacturing and services becomes increasingly blurred to some observers, we find, using a panel of Swedish firms, clear evidence that foreign sales (exports) are more important than domestic sales for stimulating R&D. This is particularly clear for manufacturing and this importance of foreign sales has increased over time, simultaneous to an opening up of the Swedish economy. Even though service industries have seen an increase in both R&D and trade over time, it is thus mainly manufacturing that has benefited from increased possibilities for absorptive capacity. This result suggests a clear dichotomy between manufacturing and services in terms of how they react to trade and how they turn towards the foreign market vs. the domestic market to find stimuli for innovation.


Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics


  • Research and development, Foreign and domestic sales , Services Manufacturing
Original languageEnglish
Pages (from-to)367-391
JournalJournal of Industry, Competition and Trade
Issue number3
Publication statusPublished - 2014
Publication categoryResearch