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Does innovation cause exports? Evidence from exogenous innovation impulses and obstacles using German micro data

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Author Info
Stefan Lachenmaier
Ludger Wößmann

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Abstract

Trade and growth theories predict a mutual causation of innovation and exports. We test empirically whether innovation causes exports using a uniquely rich German micro dataset. Our instrumental-variable strategy identifies variation in innovative activity that is caused by specific impulses and obstacles reported by the firms, which can reasonably be viewed as exogenous to firms' export performance. We find that innovation attributable to this variation leads to an increase of roughly seven percentage points in the export share of German manufacturing firms. The evidence is robust to several alternative specifications and heterogeneous across sectors, being stronger in technology-intensive sectors. Copyright 2006, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/oep/gpi043
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Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 58 (2006)
Issue (Month): 2 (April)
Pages: 317-350
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Handle: RePEc:oup:oxecpp:v:58:y:2006:i:2:p:317-350

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sourafel Girma & Holger Görg & Aoife Hanley, 2008. "R&D and Exporting: A Comparison of British and Irish Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 750-773, December. [Downloadable!] (restricted)
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  2. Inmaculada Martínez Zarzoso & Laura Márquez Ramos, 2005. "International Trade, Technological Innovation And Income: A Gravity Model Approach," Working Papers. Serie EC 2005-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  3. Roberto Álvarez & Álvaro García, 2008. "Productivity, Innovation and Exportations in the Chilean Manufacturing Industry," Working Papers Central Bank of Chile 476, Central Bank of Chile. [Downloadable!]
  4. Stefan Lachenmaier & Horst Rottmann, 2007. "Effects of Innovation on Employment: A Dynamic Panel Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  5. Flora Bellone & Sarah Guillou & Lionel Nesta, 2009. "Are Export Premia Robust to Innovation Statistics ?," Documents de Travail de l'OFCE 2009-15, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  6. Prashanth Mahagaonkar & Rainer Schweickert & Aditya S. Chavali, 2009. "Sectoral R&D Intensity and Exchange Rate Volatility: A Panel Study for OECD Countries," Kiel Working Papers 1531, Kiel Institute for the World Economy. [Downloadable!]
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