Openness and Innovation

Ben Shepherd

South Asia Economic Journal, 2017, vol. 18, issue 1, 64-75

Abstract: This article uses firm-level data for India to examine the determinants of innovation activity, focusing on variables related to economic openness. Firms that export and those that import are found to be significantly more likely to engage in innovation, defined sequentially as the introduction of new products, new processes, new systems, or devotion of financial resources or time to research and development. Concretely, exporters are 22 per cent more likely to introduce a new product than non-exporters, while the corresponding figure is 66 per cent for importers. Openness to trade is, therefore, a key determinant of firm-level innovation, which is a key component of economic growth.

Keywords: Trade; innovation; firm-level data (search for similar items in EconPapers)
JEL-codes: F13 F14 O24 O30 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:soueco:v:18:y:2017:i:1:p:64-75

DOI: 10.1177/1391561416689748

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