The impact of domestic research and development on textile and clothing industry exports: The difference and system GMM approach

Document Type : Research Paper

Authors

1 economic payam noor university

2 economic payame noor univercity

3 economic, payame noor univercity

10.22111/innoeco.2026.53343.1209

Abstract

Nowadays the knowledge and innovation are the foundation of production and the dynamism and growth of the industry are key factors affecting the sustainable development of societies. Research and development activities, through innovation, lead to the production of new products, improved quality, diversification of goods and services, reduced production costs, and ultimately increase competitiveness and exports. The experience has shown that countries that have directed their trade towards industrial goods have experienced faster economic growth. In this regard, the textile and clothing industry, as one of the important and employment-generating industrial sectors, plays a significant role in promoting exports and creating value added. Therefore, paying attention to exports in the industrial sector, especially the textile and clothing industry, is of great importance. Research and development expenditures, along with other factors, play an important role in promoting exports; therefore Accordingly this article examines the impact of domestic research and development expenditures on the exports of the Iranian textile and clothing industry at the 4-digit level of ISIC code (Rev4) by using the dynamic panel data model and the Difference and System GMM (generalized method-of moments) from 2002 to 2021. The results show that research and development expenditures have a negative and significant impact on the exports of this industry as a 1 percent increase in research and development expenditures leads to a 0.34 percent decrease in industrial exports.

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