The Joint Impact of Innovation and Knowledge Spillovers on Productivity and Growth for Exporting Firms

Hans Lööf () and Pardis Nabavi

The World Economy, 2015, vol. 38, issue 4, 730-750

Abstract: type="main" xml:id="twec12214-abs-0001">

This paper provides new insights regarding the role of innovation and localisation on the levels and growth of total factor productivity among exporting firms. For that purpose, we establish a dynamic model using data collected from nearly 10,000 Swedish exporting firms over a 12-year period. Different innovation proxies are used, and we distinguish between persistent and non-persistent innovators, while knowledge from outside the firm is measured by a newly developed methodology with detailed spatial resolution. The econometric evidence shows two distinct results. First, persistent innovators benefit significantly more than other exporters from access to a rich spectrum of nearby knowledge. Second, the level of productivity among non-innovative exporters and exporters that are only temporary engaged in innovation is positively affected by externalities in the most knowledge-intense local milieus.

Date: 2015
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