How innovation impacts firms' export survival: Does export mode matter?

Meihong Dai, Haiyang Liu and Lingtao Lin

The World Economy, 2020, vol. 43, issue 1, 81-113

Abstract: The innovation‐export nexus has been extensively explored, while relatively few studies have focused on innovation's impact on firms' export survival and the role of export mode. Using a large panel dataset from China, this research empirically explores how innovation impacts firms' export survival, considering export modes. First, we employ the discrete‐time survival analysis model (cloglog) to examine this research addressing the censored issue. Second, the propensity score matching (PSM) methodology is employed to address the selection‐bias issue and select the similar firms based on which to compare their Kaplan–Meier survivor probability. Results present a positive role of innovation in the export survival of direct exporters; however, there is an inverted‐U relationship between innovation intensity and their survival probability. For indirect exporters, evidence shows an insignificant innovation‐export survival nexus. In addition, results show higher export survival for Chinese innovative exporters who are foreign‐owned, highly export‐intensive, long‐lasting in export market, in technology industries. For innovative exporters who export directly, those in medium and low‐technological industries and export capital goods are more likely to survive. Our research provides insights for Chinese exporters regarding innovation participation and suggests the government conducting prudent and deliberate design for innovation strategy.

Date: 2020
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