Learning from trade through innovation: Causal link between imports, exports and innovation in Spanish microdata

The paper explores the learning from trade hypothesis. Standardized research approach searchs for learning e¤ects from trade focusing solely on exports, whereby rm’s learning e¤ects are accounted in the form of total factor productivity improvements. In contrast, this papers de nes a rm learning from trade in terms of introduction of either new products or processes induced by its import and export links with foreign markets. By using microdata for a large sample of Spanish rms, including data on innovation and trade, we nd clear sequencing between imports, exports and innovation. The results suggest that rms learn primarily from import links, which enables them to innovate products and processes and to dress up for starting to export. In a sequence, exporting may enable rms to introduce further innovations. These positive learning e¤ects from trade, however, seem to be limited to small and partially medium rms only. On the other side, rms that are closer to the relevant technological frontier seem to bene t more from trading activities in terms of innovation than the technological laggard fi rms.