Ilke VAN BEVEREN (Lessius University College, Department of Business Studies, Antwerp and UniversitŽ catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)) Hylke VANDENBUSSCHE (UniversitŽ catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), Katholieke Universiteit Leuven, LICOS Centre for Institutions and Economic Performance and ¤ CEPR.)
Abstract
Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that the combination of product and process innovation, rather than either of the two in isolation, increases a firmÕs probability to enter the export market. After controlling for potential endogeneity of the innovation activities, only firms with a sufficiently high probability to start exporting engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation.
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