Product and Process Innovation and Firms? decision to Export

Hylke Vandenbussche and Ilke Vanbeveren
Authors registered in the RePEc Author Service: Ilke Van Beveren

No 7846, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze the relationship between firm-level innovation activities and firms? propensity to start exporting for firms in a small open economy. We measure innovation by innovative effort (R&D) as well as by innovative output (product and process innovation). After carefully correcting for endogeneity and selection issues, the evidence points to firms self-selecting into innovation in anticipation of their entry into export markets, rather than product and process innovation triggering entry into the export market. These results suggest that governments can foster firm-level innovation through trade liberalization.

Keywords: Exports; Process innovation; Product innovation; R&d; Self-selection (search for similar items in EconPapers)
JEL-codes: D24 F14 L25 O31 O33 (search for similar items in EconPapers)
Date: 2010-06
References: View complete reference list from CitEc
Citations: View citations in EconPapers (94)

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