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Innovation and exporting: evidence from Spanish manufacturing firms

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  • Aida Caldera

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Abstract

This paper investigates the relationship between innovation and the export behavior of firms using data from a representative panel of Spanish firms over 1991-2002. It presents a simple theoretical model of the firm decision to export and innovate that guides the econometric analysis. Consistent with the predictions of the theoretical model, the econometric results suggest a positive effect of firm innovation on the probability of participation in export markets. The results further reveal the heterogeneous effects of different types of innovations on the firm export participation. In particular, product upgrading appears to have a larger effect on the firm export participation than the introduction of cost-saving innovations. These findings are robust to firm unobserved heterogeneity, dynamic specifications, and to the use of instrumental variables to control for the potential endogeneity between innovation and exporting. © 2010 Kiel Institute.
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  • Aida Caldera, 2010. "Innovation and exporting: evidence from Spanish manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(4), pages 657-689, December.
  • Handle: RePEc:spr:weltar:v:146:y:2010:i:4:p:657-689
    DOI: 10.1007/s10290-010-0065-7
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    File URL: http://hdl.handle.net/10.1007/s10290-010-0065-7
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    More about this item

    Keywords

    Firm data; Exporting; Innovation; R&D; F14; O31;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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