The Impact of High-Tech Exports on Income: Findings on the Translog Production Function

Abstract

This study aims to present new findings to the literature by analyzing the impact of high-tech(HT) exports on revenue using panel data methods in 49 countries and under both Cobb-Douglas and Translog production functions for the period 1988-2017. No other study has been found in the literature investigating the HT-Income relationship in the Translog production function. In this aspect, the current analysis is a pioneer study. Regression coefficients were estimated by the Driscoll-Kraay method, which produces robust standard errors in cases where OLS assumptions cannot be met. Furthermore, the existence of cointegration between the series was investigated by the stationarity of the residuals. According to the findings, the income elasticity of the physical capital contributing to the scale is 0.668; income elasticity of human capital was calculated as 0.584 and income elasticity of HT exports was calculated as 0.071. However, HT exports have been found to contribute to income per labor force, while human capital contributes to income per labor force along an increasing curve. The relationship between physical capital and income seems decidedly linear. These findings were tested for robustness with alternative regression methods in addition to the main models, and results compatible with the existing models were obtained.