Product Innovation and Export Strategy: An Application to French Dairy Firms

Kevin Randy Chemo Dzukou, Sabine Duvaleix and Karine Latouche
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Kevin Randy Chemo Dzukou: SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement

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Abstract: The aim of this paper is to advance understanding of the introduction of new products on foreign markets. Since most data on innovation are available at firm level, previous studies have focused on the cost-reducing aspect of innovation. In this article, we highlight the role of quality-upgrading aspect of innovation. We present our theoretical model with empirical evidence from disaggregated (at the firm-product-destination level) French data. In the model, firms upgrade their product-quality through innovation and by introducing new products, which encourages the firms to adapt their export prices. The direction of the effect depends on the scope for quality differentiation on the destination market. Thanks to the Mintel Global New Products Database, a unique database of new product launches that measures innovation at a disaggregated level, we were able to test model predictions for the French dairy industry with a matching methodology. The results are consistent with the predictions and highly robust.

Keywords: New product introduction; Export prices; Quality upgrading; Quality differentiation (search for similar items in EconPapers)
Date: 2022
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Published in SSRN Electronic Journal, inPress, ⟨10.2139/ssrn.4173087⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04093766

DOI: 10.2139/ssrn.4173087

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