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Product and Process Innovation and the Decision to Export: Firm-level Evidence for Belgium

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  • Ilke Van Beveren
  • Hylke Vandenbussche

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 firmç’¤s 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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File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp247.pdf
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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 24709.

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Date of creation: 2009
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Handle: RePEc:lic:licosd:24709

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Keywords: Exports; Product innovation; Process innovation; Self-selection; Firm heterogeneity;

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  1. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-94, October.
  2. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
  3. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
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Cited by:
  1. Dahai Fu & Yanrui Wu & Yihong Tang, 2011. "Does Innovation Matter for Chinese High-Tech Exports? A Firm-Level Analysis," Economics Discussion / Working Papers 11-21, The University of Western Australia, Department of Economics.
  2. Keiko ITO, 2012. "Sources of Learning-by-Exporting Effects: Does Exporting Promote Innovation?," Working Papers DP-2012-06, Economic Research Institute for ASEAN and East Asia (ERIA).

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