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Product and process innovation and firms' decision to export

Product and process innovation and firms' decision to export 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Policy Reform Taylor & Francis

Product and process innovation and firms' decision to export

22 pages

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References (43)

Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
1748-7889
eISSN
1748-7870
DOI
10.1080/17487870903546267
Publisher site
See Article on Publisher Site

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.

Journal

Journal of Economic Policy ReformTaylor & Francis

Published: Mar 1, 2010

Keywords: exports; R&D; product innovation; process innovation; self‐selection; D24; F14; L25; O31; O33

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