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Global Engagement and the Innovation Activities of Firms

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  • Chiara Criscuolo
  • Jonathan E. Haskel
  • Matthew J. Slaughter

Abstract

Firms that export or, even more so, are part of a multinational enterprise tend to exhibit higher productivity than their purely domestic counterparts. To better understand this correlation, we incorporate the perspective of industrial organization that one of the main drivers of differences in productivity is differences in knowledge. We examine a new data set of several thousand U.K. enterprises covering all industries from 1994 through 2000. For each enterprise we have multiple detailed measures of knowledge outputs, knowledge investments, and sources of existing knowledge. We find that globally engaged firms do innovate more. But this is not just because globally engaged firms use more researchers. It is also because they learn more from more sources such as suppliers and customers, universities, and their intra-firm worldwide pool of information. We also find that the relative importance of knowledge sources varies systematically with the type of innovation.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11479.

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Date of creation: Jul 2005
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Handle: RePEc:nbr:nberwo:11479

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