Internationalization and innovation of firms: evidence and policy

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

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 likely 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: economic integration; European Union; export; globalization; industrial enterprise; industrial policy; innovation; manufacturing; sustainable development (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Date: 2013-10
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-ino, nep-int and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86)

Published in Economic Policy, October, 2013, 28(76), pp. 663-700. ISSN: 0266-4658

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Related works:
Working Paper: Internationalization and Innovation of Firms: Evidence and Policy (2014)
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)
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