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Innovation and internationalization through exports

  • Bruno Cassiman

    ([1] IESE Business School, Barcelona, Spain[2] Department of Managerial Economics, Strategy and Innovation, K.U. Leuven, Leuven, Belgium[3] CEPR, Barcelona, Spain)

  • Elena Golovko

    (Department of Organization & Strategy, CIR and CentER, Tilburg University, Tilburg, The Netherlands)

Successful product innovation leads to the decision by small and medium enterprises (SMEs) to enter the export market. We argue that in addition to a direct effect of innovation on exports, product innovation, through its effect on firm productivity, increases the likelihood of the firm entering the export market. Using a panel of Spanish manufacturing firms, we show that the strong positive association found between firm productivity and exports in the literature relates to the firm’s earlier innovation decisions, and that, when controlling for product innovation, the relationship between productivity and exports vanishes for these innovating firms.

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Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

Volume (Year): 42 (2011)
Issue (Month): 1 (January)
Pages: 56-75

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Handle: RePEc:pal:jintbs:v:42:y:2011:i:1:p:56-75
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