IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v32y2018i1p3-38.html
   My bibliography  Save this article

Innovation, complementarity, and exporting. Evidence from German manufacturing firms

Author

Listed:
  • Rosa Bernardini Papalia
  • Silvia Bertarelli
  • Susanna Mancinelli

Abstract

This paper assesses whether there might be complementarities between different types of innovation activities (product, process and organizational) and how these effects may be linked to the likelihood that a firm will export. Complementarity is addressed through the properties of supermodular functions, and firm heterogeneity by export destination is explored. A new econometric strategy to test for pairwise complementarity in a function with three independent variables and a binary dependent variable is proposed. Exogenous and endogenous innovation variables are considered by using bootstrapping for hypothesis testing, propensity score matching and treatment effects models. The empirical analysis shows that complementarity relationships between innovation strategies are more likely to exist when firms export to multiple foreign markets.

Suggested Citation

  • Rosa Bernardini Papalia & Silvia Bertarelli & Susanna Mancinelli, 2018. "Innovation, complementarity, and exporting. Evidence from German manufacturing firms," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 3-38, January.
    • Handle: RePEc:taf:irapec:v:32:y:2018:i:1:p:3-38
    DOI: 10.1080/02692171.2017.1332576
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2017.1332576
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171.2017.1332576?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ilke Van Beveren & Hylke Vandenbussche, 2010. "Product and process innovation and firms' decision to export," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 3-24.
    2. Mohnen, Pierre & Roller, Lars-Hendrik, 2005. "Complementarities in innovation policy," European Economic Review, Elsevier, vol. 49(6), pages 1431-1450, August.
    3. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    4. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    5. Susan Athey & Armin Schmutzler, 1995. "Product and Process Flexibility in an Innovative Environment," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 557-574, Winter.
    6. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
    7. Rabah Amir, 2005. "Supermodularity and Complementarity in Economics: An Elementary Survey," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 636-660, January.
    8. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
    9. Keld Laursen & Nicolai J. Foss, 2003. "New human resource management practices, complementarities and the impact on innovation performance," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(2), pages 243-263, March.
    10. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
    11. Rabah Amir, 2005. "Supermodularity and Complementarity in Economics: An Elementary Survey," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 636-660, January.
    12. Long, Ngo Van & Raff, Horst & Stähler, Frank, 2011. "Innovation and trade with heterogeneous firms," Journal of International Economics, Elsevier, vol. 84(2), pages 149-159, July.
    13. Alla Lileeva & Daniel Trefler, 2010. "Improved Access to Foreign Markets Raises Plant-level Productivity…For Some Plants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1051-1099.
    14. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    15. Schmiedeberg, Claudia, 2008. "Complementarities of innovation activities: An empirical analysis of the German manufacturing sector," Research Policy, Elsevier, vol. 37(9), pages 1492-1503, October.
    16. Cassiman, Bruno & Golovko, Elena & Martínez-Ros, Ester, 2010. "Innovation, exports and productivity," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 372-376, July.
    17. Martin Carree & Boris Lokshin & René Belderbos, 2011. "A note on testing for complementarity and substitutability in the case of multiple practices," Journal of Productivity Analysis, Springer, vol. 35(3), pages 263-269, June.
    18. Jennifer Percival & Brian Cozzarin, 2008. "Complementarities Affecting the Returns to Innovation," Industry and Innovation, Taylor & Francis Journals, vol. 15(4), pages 371-392.
    19. Gomez, Jaime & Vargas, Pilar, 2009. "The effect of financial constraints, absorptive capacity and complementarities on the adoption of multiple process technologies," Research Policy, Elsevier, vol. 38(1), pages 106-119, February.
    20. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    21. Guellec, Dominique & Pottelsberghe de la Potterie, Bruno v., 2000. "Applications, grants and the value of patent," Economics Letters, Elsevier, vol. 69(1), pages 109-114, October.
    22. James Heckman & Salvador Navarro-Lozano, 2004. "Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 30-57, February.
    23. Toke Reichstein & Ammon Salter, 2006. "Investigating the sources of process innovation among UK manufacturing firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(4), pages 653-682, August.
    24. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
    25. Sascha Becker & Peter Egger, 2013. "Endogenous product versus process innovation and a firm’s propensity to export," Empirical Economics, Springer, vol. 44(1), pages 329-354, February.
    26. Andrew B. Bernard & J. Bradford Jensen, 2004. "Why Some Firms Export," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 561-569, May.
    27. Ilke Van Beveren & Hylke Vandenbussche, 2010. "Product and process innovation and firms' decision to export," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 3-24.
    28. Bocquet, Rachel & Brossard, Olivier & Sabatier, Mareva, 2007. "Complementarities in organizational design and the diffusion of information technologies: An empirical analysis," Research Policy, Elsevier, vol. 36(3), pages 367-386, April.
    29. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    30. Topkis Donald M., 1995. "Comparative Statics of the Firm," Journal of Economic Theory, Elsevier, vol. 67(2), pages 370-401, December.
    31. Jaider Vega-Jurado & Antonio Gutiérrez-Gracia & Ignacio Fernández-de-Lucio, 2009. "Does external knowledge sourcing matter for innovation? Evidence from the Spanish manufacturing industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(4), pages 637-670, August.
    32. N. E. Savin, 1980. "The Bonferroni and the Scheffé Multiple Comparison Procedures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 255-273.
    33. Freedman, David A. & Sekhon, Jasjeet S., 2010. "Endogeneity in Probit Response Models," Political Analysis, Cambridge University Press, vol. 18(2), pages 138-150, April.
    34. Brian Cozzarin & Jennifer Percival, 2006. "Complementarities between organisational strategies and innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(3), pages 195-217.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Silvia Bertarelli & Chiara Lodi, 2018. "Innovation and Exporting: A Study on Eastern European Union Firms," Sustainability, MDPI, vol. 10(10), pages 1-21, October.
    2. Xuhua Hu & Bertha Ada Danso & Isaac Adjei Mensah & Michael Addai, 2020. "Does Innovation Type Influence Firm Performance? A Dilemma of Star-Rated Hotels in Ghana," Sustainability, MDPI, vol. 12(23), pages 1-27, November.
    3. Wu, Lichao & Wei, Yingqi & Wang, Chengang, 2021. "Disentangling the effects of business groups in the innovation-export relationship," Research Policy, Elsevier, vol. 50(1).
    4. Wu, Lichao & Wei, Yingqi & Wang, Chengang & McDonald, Frank & Han, Xia, 2022. "The importance of institutional and financial resources for export performance associated with technological innovation," Technological Forecasting and Social Change, Elsevier, vol. 185(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Susanna Mancinelli & Rosa Bernardini Papalia & Silvia Bertarelli, 2015. "Complementarity among innovations for exporting in German manufacturing firms," Working Papers 2015044, University of Ferrara, Department of Economics.
    2. Gilli, Marianna & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU," Ecological Economics, Elsevier, vol. 103(C), pages 56-67.
    3. Antonioli, Davide & Mancinelli, Susanna & Mazzanti, Massimiliano, 2013. "Is environmental innovation embedded within high-performance organisational changes? The role of human resource management and complementarity in green business strategies," Research Policy, Elsevier, vol. 42(4), pages 975-988.
    4. Falk, Martin & de Lemos, Francisco Figueira, 2019. "Complementarity of R&D and productivity in SME export behavior," Journal of Business Research, Elsevier, vol. 96(C), pages 157-168.
    5. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    6. repec:ipg:wpaper:2014-488 is not listed on IDEAS
    7. Carlo Altomonte & Tommaso Aquilante & Gábor Békés & Gianmarco I.P. Ottaviano, 2013. "Internationalization and innovation of firms: evidence and policy [Managing knowledge within and outside the multinational corporation]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 28(76), pages 663-700.
    8. Trinh, Long Q., 2016. "Dynamics of Innovation and Internationalization among Small and Medium-Sized Enterprises in Viet Nam," ADBI Working Papers 580, Asian Development Bank Institute.
    9. Movahedi, Mohammad & Shahbazi, Kiumars & Gaussens, Olivier, 2017. "Innovation and willingness to export: Is there an effect of conscious self-selection?," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 11, pages 1-22.
    10. Silviano Esteve-Pérez & Diego Rodríguez, 2013. "The dynamics of exports and R&D in SMEs," Small Business Economics, Springer, vol. 41(1), pages 219-240, June.
    11. Caroline Mothe & Uyen T. Nguyen-Thi & Phu Nguyen-Van, 2015. "Complementarities in organizational innovation practices: evidence from French industrial firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(6), pages 569-595, September.
    12. Claudio Fassio, 2018. "Export-led innovation: the role of export destinations," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 149-171.
    13. Kaz Miyagiwa & Aminata Sissoko, 2013. "The free-rider problem and the optimal duration of research joint ventures: theory and evidence from the Eureka program," Working Papers 1302, Florida International University, Department of Economics.
    14. Caroline Mothe & Uyen T. Nguyen-Thi & Phu Nguyen-Van, 2015. "Assessing complementarity in organizational innovations for technological innovation: the role of knowledge management practices," Applied Economics, Taylor & Francis Journals, vol. 47(29), pages 3040-3058, June.
    15. Massimiliano Bratti & Giulia Felice, 2012. "Are Exporters More Likely to Introduce Product Innovations?," The World Economy, Wiley Blackwell, vol. 35(11), pages 1559-1598, November.
    16. Ballot, Gérard & Fakhfakh, Fathi & Galia, Fabrice & Salter, Ammon, 2015. "The fateful triangle: Complementarities in performance between product, process and organizational innovation in France and the UK," Research Policy, Elsevier, vol. 44(1), pages 217-232.
    17. Caroline Mothe & Uyen T. Nguyen-Thi & Phu Nguyen-Van, 2014. "Are organizational innovation practices complements or substitutes for technological innovation performance?," Working Papers of BETA 2014-12, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    18. Ma, Yue & Tang, Heiwai & Zhang, Yifan, 2014. "Factor Intensity, product switching, and productivity: Evidence from Chinese exporters," Journal of International Economics, Elsevier, vol. 92(2), pages 349-362.
    19. Ito, Banri & Xu, Zhaoyuan & Yashiro, Naomitsu, 2015. "Does agglomeration promote internationalization of Chinese firms?," China Economic Review, Elsevier, vol. 34(C), pages 109-121.
    20. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2018. "Internationalisation, innovation and productivity in services: evidence from Germany, Ireland and the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(3), pages 585-615, August.
    21. Peters, Bettina & Roberts, Mark J. & Vuong, Van Anh, 2022. "Firm R&D investment and export market exposure," Research Policy, Elsevier, vol. 51(10).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:32:y:2018:i:1:p:3-38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.