Impact of Innovation and Exports on Productivity: Are There Complementary Effects?

Saša Petković, Jelica Rastoka and Dragana Radicic
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Saša Petković: University of Banja Luka (UNIBL), Faculty of Economics, Department for Business Economics and Management, 78000 Banja Luka, Bosnia and Herzegovina
Jelica Rastoka: London School of Economics and Political Science (LSE), Department of Economics, London WC2A 2AE, UK

Sustainability, 2023, vol. 15, issue 9, 1-22

Abstract: The relationship between firms’ exports and increases in productivity is generally regarded as positive. While the causal effects of process innovation are straightforward and positive, the effect of product innovation on productivity is ambiguous. However, there is a lack of empirical evidence on a joint effect that innovation and exports have on firms’ productivity. In our attempt to fill this gap, we explore individual and joint effects of innovation and exports on productivity by employing cross-sectional firm-level data. We use the sixth wave of the Business Environment and Enterprise Performance Survey (BEEPS VI: 2018–2020) conducted by the EBRD and the World Bank. Using a stratified random sampling, the data was collected from interviews with representatives of randomly chosen firms from 32 countries. The overall results suggest that exporting firms are more productive than non-exporters, while the impact of innovation is more heterogeneous. Whereas EU and high-income countries reap the productivity benefits, this effect is absent in other regions and countries with medium and low-income levels. Finally, our results indicate the absence of a joint effect of innovation and exports on productivity, across different geographical regions and countries of different income levels.

Keywords: exports; innovation; learning-by-exporting (LBE); labor productivity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Impact of innovation and exports on productivity: are there complementary effects? (2023)
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