Transposons play an important role in driving evolution,
Exon shifting involves the transposition of an exon along with the transposon. This occurs where a gene is flanked by the same transposon, resulting in its transfer to another location. This can result in changing the reading frame of the gene, causing a frame shift, and leading to a dysfunctional protein product. This most frequently occurs with LINE and LTR transposons.
A pseudogene can be formed by retro-transposition (as occurs with RNA transposons, where reverse transcribed cDNA is inserted). This gene does not have the correct processing signals (promoters, enhancers, ribosome binding site / Shine-Dalgarno sequences), and so is unable to be transcribed and subsequently not converted to a protein product.
Duplication of DNA transposons can occur where the transposition event jumps over the replication fork. This results in the duplication of the transposon in one of the daughter strands, while the other daughter strand contains only one copy. Although this is rare, over evolutionary timescales it is possible to build up copies of transposons by this method. Genome sequencing, used to identify DNA transposons that have been replicated by this process that are conserved between species, could be used to estimate speciation timescales, allowing these events to be dated.