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Innovation and Export of Vietnam's SME Sector

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Author Info
Anh Ngoc Nguyen () (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam)
Ngoc Quang Pham () (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam)
Chuc Dinh Nguyen () (Aston Business School, Aston University, UK)
Nhat Duc Nguyen () (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam)

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Abstract

Innovation has long been considered an important factor for creating and maintaining the competitiveness of nations and firms. Common knowledge stands that innovation is the cause of the increase of exports. However, contradicting empirical evidences are reported in the literature on the causality between innovation and export. In this paper we examine whether innovation performed by small and medium enterprises (SMEs) enhances their exporting likelihood in the context of a developing country of Vietnam. Using an uniquely rich Vietnamese SMEs database, we find that innovation as measured directly by 'new products', 'new production process' and 'improvement of existing products' are important determinants of exports by Vietnamese SMEs. We add to the current literature by examining modification of existing products as an innovation activity. We also find evidence of endogeneity of innovation that may lead to biased estimate of innovation in previous studies, which failed to take this problem into account.

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Publisher Info
Paper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 09.

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Length: 25 pages
Date of creation: Mar 2008
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Handle: RePEc:dpc:wpaper:0908

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Related research
Keywords: Innovation; Export; Vietnam; SME; Instrumental Variable; Bivariate;

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Find related papers by JEL classification:
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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  1. Greenhalgh, Christine & Taylor, Paul & Wilson, Rob, 1994. "Innovation and Export Volumes and Prices--A Disaggregated Study," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 102-35, January. [Downloadable!] (restricted)
    Other versions:
  2. Le Van, Cuong & Saglam, H. Cagri, 2004. "Quality Of Knowledge Technology, Returns To Production Technology, And Economic Development," Macroeconomic Dynamics, Cambridge University Press, vol. 8(02), pages 147-161, April. [Downloadable!]
    Other versions:
  3. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(1), pages 134-157, March. [Downloadable!] (restricted)
    Other versions:
  4. Greenhalgh, Christine, 1990. "Innovation and Trade Performance in the United Kingdom," Economic Journal, Royal Economic Society, vol. 100(400), pages 105-18, Supplemen.
  5. Valdemar Smith & Erik Strøjer Madsen & Mogens Dilling-Hansen, 2002. "Do R&D Investments Affect Export Performance?," CIE Discussion Papers 2002-09, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
  6. Arnold, Jens Matthias & Hussinger, Katrin, 2004. "Export Behavior and Firm Productivity in German Manufacturing : A Firm-level Analysis," ZEW Discussion Papers 04-12, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  7. Richard Blundell & Monica Costa Dias, 2002. "Alternative approaches to evaluation in empirical microeconomics," CeMMAP working papers CWP10/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
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  8. Stefan Lachenmaier & Ludger Woessmann, 2004. "Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  9. Sterlacchini, Alessandro, 1999. "Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performance," Research Policy, Elsevier, vol. 28(8), pages 819-832, November. [Downloadable!] (restricted)
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