Value-added in high technology and industrial basic research: a weighted network observing the trade of high-tech goods

Expenditure on research and development (R&D) is a key indicator of the innovative efforts of countries. In this paper, we want to examine through a new approach the relationship between basic research and economic benefits. Although we are aware that the topic has already been extensively addressed, this paper differs from the previous literature because it focuses on value added trade instead of gross trade flows. We use an Exponential Random Graph Model for weighted networks to study the impact of private investment in basic research on value-added of exports in high technology, namely the domestic value added absorbed abroad. We want to understand if this measure (without intermediate imports) is able to confirm the results of the previous literature, which used gross flows. Our results show that private investment in basic research has a positive influence on exports, giving a competitive advantage in international trade.