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Innovation and Export of Vietnam's SME Sector

Author

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  • 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)

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.

Suggested Citation

  • Anh Ngoc Nguyen & Ngoc Quang Pham & Chuc Dinh Nguyen & Nhat Duc Nguyen, 2008. "Innovation and Export of Vietnam's SME Sector," Working Papers 09, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:0908
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    More about this item

    Keywords

    Innovation; Export; Vietnam; SME; Instrumental Variable; Bivariate;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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