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Innovation, complementarity, and exporting. Evidence from German manufacturing firms

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  • Rosa Bernardini Papalia
  • Silvia Bertarelli
  • Susanna Mancinelli

Abstract

This paper assesses whether there might be complementarities between different types of innovation activities (product, process and organizational) and how these effects may be linked to the likelihood that a firm will export. Complementarity is addressed through the properties of supermodular functions, and firm heterogeneity by export destination is explored. A new econometric strategy to test for pairwise complementarity in a function with three independent variables and a binary dependent variable is proposed. Exogenous and endogenous innovation variables are considered by using bootstrapping for hypothesis testing, propensity score matching and treatment effects models. The empirical analysis shows that complementarity relationships between innovation strategies are more likely to exist when firms export to multiple foreign markets.

Suggested Citation

  • Rosa Bernardini Papalia & Silvia Bertarelli & Susanna Mancinelli, 2018. "Innovation, complementarity, and exporting. Evidence from German manufacturing firms," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 3-38, January.
  • Handle: RePEc:taf:irapec:v:32:y:2018:i:1:p:3-38
    DOI: 10.1080/02692171.2017.1332576
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    References listed on IDEAS

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