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From innovation to exporting or vice versa? Causal link between innovation activity and exporting in Slovenian microdata

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  • Joze P. Damijan
  • Crt Kostevc
  • Saso Polanec

Abstract

Firm productivity and export decision are closely related to its innovation ac- tivity. Product innovation may play a more important role in the decision to start exporting, while the decision for process innovation may be triggered by success- ful exporting. This suggests that the causality between innovation and exporting may run from product innovation to exporting and conesequently from exporting to process innovation and reverse productivity improvements. Using detailed mi- crodata, including innovation survey, industrial production survey and information on trade, for Slovenian firms in 1996-2002 we investigate this dual causal relation- ship between firms' innovation and exporting activity. We find no evidence for the hypothesis that either product or process innovations increase the probability of becoming a first time exporter, but find consistent support both in the innovation survey as well as in the industrial production survey that exporting does lead to pro- ductivity improvements. These, however, are likely to be related to process rather than product innovations and are limited to a sample of medium and large sized first time exporters only.

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Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 20408.

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Date of creation: 2008
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Handle: RePEc:lic:licosd:20408

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Keywords: Firm heterogeneity; innovation; exporting; productivity; matching;

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References

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Citations

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Cited by:
  1. De Beule, Filip & Van Beveren, Ilke, 2010. "Does firm agglomeration drive product innovation and renewal?," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/386075, Katholieke Universiteit Leuven.
  2. Van Beveren, Ilke & Vandenbussche, Hylke, 2009. "Product and process innovation and the decision to export: firm-level evidence for Belgium," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/385823, Katholieke Universiteit Leuven.
  3. 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.
  4. Castellacci, Fulvio, 2010. "Firm heterogeneity, international cooperations and export participation," MPRA Paper 27585, University Library of Munich, Germany.
  5. ITO Keiko & LECHEVALIER Se'bastien, 2010. "Why Do Some Firms Persistently Outperform Others? An investigation of the interactions between innovation and export strategies," Discussion papers 10037, Research Institute of Economy, Trade and Industry (RIETI).
  6. Van Beveren, Ilke & Vandenbussche, Hylke, 2009. "Product and process innovation and the decision to export," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/254512, Katholieke Universiteit Leuven.
  7. Belderbos, Rene & Van Roy, Vincent, 2010. "Productivity spillovers from foreign affiliates and domestic firm internationalization: firm-level evidence for Belgium," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/311578, Katholieke Universiteit Leuven.

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