Internationalization and Innovation of Firms: Evidence and Policy

Carlo Altomonte (), Tommaso Aquilante, Gábor Békés and Gianmarco Ottaviano

CEP Reports from Centre for Economic Performance, LSE

Abstract: We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom). We find strong evidence of positive association among the three firm-level characteristics across countries and sectors. We also find that the positive correlation between internationalization and innovation survives after controlling for productivity, with some evidence of causality running from the latter to the former. Our analysis suggests that export promotion per se is unlikely to lead to sustainable internationalization because internationalization goes beyond export and because, in the medium-to-long term, internationalization is driven by innovation. We recommend coordination and integration of internationalization and innovation policies 'under one roof' at both the national and EU levels, and propose a bigger coordinating role for EU institutions.

Keywords: Internationalization; innovation; firm-level data; exports; foreign direct investment; outsourcing (search for similar items in EconPapers)
JEL-codes: F13 F23 F68 O31 O38 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-eur, nep-ino, nep-int, nep-knm, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Internationalization and innovation of firms: evidence and policy (2014)
Journal Article: Internationalization and innovation of firms: evidence and policy (2013)
Working Paper: Internationalization and innovation of firms: evidence and policy (2013)
Working Paper: Internationalization and innovation of firms: Evidence and policy (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepsps:032

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