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Dissecting the impact of innovation on exporting in Turkey

  • Alessia LO TURCO

    ()

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Daniela MAGGIONI

    ()

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

Making use of an original firm level dataset, we explore the causal impact of innovation on the manufacturing firm export activity in Turkey. We model process and product innovation as separately - through cost savings and product quality improvements, respectively - affecting the firm profitability and, consequently, the firm export propensity. This modeling choice highlights heterogeneous effects across high and low income destination markets. In a Multiple Propensity Score Matching framework, we, then, test the impact of each innovation activity and of their joint adoption. We find that only the latter fosters the first time entry into exporting, when the destination market is high income. Nevertheless, innovation positively affects the firmexport propensity. New product introduction is more rewarding than process innovation, especially for exporting to lowincome economies. Process innovation, though, strengthens the positive role of product innovation for exporting to more advanced markets.

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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 388.

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Length: 29
Date of creation: Jan 2013
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Handle: RePEc:anc:wpaper:388
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  1. Verhoogen, Eric A, 2007. "Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector," CEPR Discussion Papers 6385, C.E.P.R. Discussion Papers.
  2. Roper, Stephen & Love, James H., 2002. "Innovation and export performance: evidence from the UK and German manufacturing plants," Research Policy, Elsevier, vol. 31(7), pages 1087-1102, September.
  3. Aïda Caldera Sanchez, 2010. "Innovation and exporting: Evidence from Spanish manufacturing firms," ULB Institutional Repository 2013/192285, ULB -- Universite Libre de Bruxelles.
  4. Bruno Cassiman & Elena Golovko, 2011. "Innovation and internationalization through exports," Journal of International Business Studies, Palgrave Macmillan, vol. 42(1), pages 56-75, January.
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  9. Marco Caliendo & Sabine Kopeinig, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," Discussion Papers of DIW Berlin 485, DIW Berlin, German Institute for Economic Research.
  10. Sterlacchini, Alessandro, 1999. "Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performance," Research Policy, Elsevier, vol. 28(8), pages 819-832, November.
  11. Andrew B. Bernard & Emily J. Blanchard & Ilke Van Beveren & Hylke Y. Vandenbussche, 2012. "Carry-Along Trade," NBER Working Papers 18246, National Bureau of Economic Research, Inc.
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  13. Rosario Crinò & Paolo Epifani, 2012. "Productivity, Quality and Export Behaviour," Economic Journal, Royal Economic Society, vol. 122(565), pages 1206-1243, December.
  14. Grossman, G.M. & Helpman, E., 1989. "Quality Ledders In The Theory Of Growth," Papers 148, Princeton, Woodrow Wilson School - Public and International Affairs.
  15. Alessia LO TURCO & Daniela MAGGIONI, 2012. "Imports, exports and the firm product scope: evidence from Turkey," Working Papers 384, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  16. Vanbeveren, Ilke & Vandenbussche, Hylke, 2010. "Product and Process Innovation and Firms’ decision to Export," CEPR Discussion Papers 7846, C.E.P.R. Discussion Papers.
  17. Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
  18. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
  19. Alessandro Sterlacchini, 2001. "The determinants of export performance: A firm-level study of Italian manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(3), pages 450-472, September.
  20. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 59-82.
  21. Peter K. Schott, 2004. "Across-product Versus Within-product Specialization in International Trade," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 646-677, May.
  22. Juan Carlos Hallak, 2010. "A Product-Quality View of the Linder Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 453-466, August.
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