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Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles

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Author Info
Stefan Lachenmaier ()
Ludger Woessmann ()

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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 7 percentage points in the export share of German manufacturing firms. The evidence is robust to several alternative specifications, similar for product and process innovations, and heterogeneous across sectors.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1178.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1178

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Related research
Keywords: innovation; export; trade; product cycle; German manufacturing firms; Ifo innovation survey;

Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

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References listed on IDEAS
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Cited by:
(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)
    Other versions:
  2. Nguyen, Ngoc Anh & Pham, Quang Ngoc & Nguyen, Dinh Chuc & Nguyen, Duc Nhat, 2007. "Innovation and Export of Vietnam’s SME Sector," MPRA Paper 3256, University Library of Munich, Germany. [Downloadable!]
    Other versions:
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