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Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles

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  • Stefan Lachenmaier
  • Ludger Wößmann

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Abstract

Trade and growth theories predict a mutual causation of innovation and exports. We test empirically whether innovation causes exports using a uniquely rich German micro dataset. Our instrumental-variable strategy identifies variation in innovative activity that is caused by specific impulses and obstacles reported by the firms, which can reasonably be viewed as exogenous to firms’ export performance. We find that innovation attributable to this variation leads to an increase of roughly 7 percentage points in the export share of German manufacturing firms. The evidence is robust to several alternative specifications, similar for product and process innovations, and heterogeneous across sectors.

Suggested Citation

  • Stefan Lachenmaier & Ludger Wößmann, 2004. "Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles," CESifo Working Paper Series 1178, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1178
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    Cited by:

    1. Klaus Abberger & Sascha Becker & Barbara Hofmann & Klaus Wohlrabe, 2007. "Mikrodaten im ifo Institut für Wirtschaftsforschung – Bestand, Verwendung und Zugang," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 1(1), pages 27-42, June.
    2. Tavassoli, Sam, 2013. "The Role of Product Innovation Output on Export Behavior of Firms," Working Papers 2013/05, Blekinge Institute of Technology, Department of Industrial Economics.
    3. Lachenmaier, Stefan & Rottmann, Horst, 2011. "Effects of innovation on employment: A dynamic panel analysis," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 210-220, March.
    4. Sourafel Girma & Holger Görg & Aoife Hanley, 2008. "R&D and Exporting: A Comparison of British and Irish Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 750-773, December.
    5. Márquez Ramos, Laura & Martínez Zarzoso, Inmaculada & Sanjuan Lucas, Elena & Suárez Burguet, Celestino, 2007. "Efecto De Las TIC Sobre El Comercio Y El Desarrollo Económico. Análisis Para El Caso De España/Effect of ICT on Trade and Economic Development. An Application to the Spanish Case," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 25, pages 313-340, Abril.
    6. Ainura Uzagalieva & Evžen Kocenda & Antonio Menezes, 2012. "Technological Innovation in New EU Markets," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(5), pages 48-65, September.
    7. Fulvio Castellacci & Arne Fevolden, 2014. "Capable Companies or Changing Markets? Explaining the Export Performance of Firms in the Defence Industry," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(6), pages 549-575, December.
    8. Lachenmaier Stefan & Rottmann Horst, 2007. "Employment Effects of Innovation at the Firm Level," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(3), pages 254-272, June.
    9. Nguyen, Ngoc Anh & Pham, Quang Ngoc & Nguyen, Dinh Chuc & Nguyen, Duc Nhat, 2007. "Innovation and Export of Vietnam’s SME Sector," MPRA Paper 3256, University Library of Munich, Germany.
    10. Dholakia, Ravindra H. & Kapur Deepak, 2004. "Determinants of Export Performance of Indian Firms – A Strategic Perspective," IIMA Working Papers WP2004-08-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    11. Roberto Álvarez & Álvaro García, 2008. "Productivity, Innovations and Exports in the Chilean Manufacturing Industry," Working Papers Central Bank of Chile 476, Central Bank of Chile.
    12. Sascha Becker & Peter Egger, 2013. "Endogenous product versus process innovation and a firm’s propensity to export," Empirical Economics, Springer, vol. 44(1), pages 329-354, February.
    13. Horácio C. Faustino & Joana C. Lima & Pedro Verga Matos, 2012. "Exports, Productivity and Innovation: Evidence from Portugal using micro data," Working Papers Department of Economics 2012/13, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    14. Kampik, Franziska & Dachs, Bernhard, 2010. "The innovative performance of German multinationals abroad," MPRA Paper 28102, University Library of Munich, Germany.
    15. Marcelo José Braga Nonnenberg & Ana Paula Avellar, 2014. "Exportações E Processos Inovativos: Umestudo Para América Latina E Europa Do Leste," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 105, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    16. Joana C. Lima & Horácio C. Faustino, 2010. "Determinants of Portuguese Exports to Spain: An analysis at the enterprise level," Working Papers Department of Economics 2010/07, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    17. repec:jns:jbstat:v:227:y:2007:i:3:p:254-272 is not listed on IDEAS
    18. Projektgruppe Gemeinschaftsdiagnose, 2011. "Gemeinschaftsdiagnose Frühjahr 2011: Aufschwung setzt sich fort - Europäische Schuldenkrise noch ungelöst," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 64(08), pages 03-63, April.
    19. Torben Schubert & Léopold Simar, 2011. "Innovation and export activities in the German mechanical engineering sector: an application of testing restrictions in production analysis," Journal of Productivity Analysis, Springer, vol. 36(1), pages 55-69, August.
    20. Inmaculada Martínez Zarzoso & Laura Márquez Ramos, 2005. "International Trade, Technological Innovation And Income: A Gravity Model Approach," Working Papers. Serie EC 2005-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    21. Bratti, Massimiliano & Felice, Giulia, 2009. "Exporting and Product Innovation at the Firm Level," MPRA Paper 18915, University Library of Munich, Germany.
    22. Jennifer Abel-Koch, 2013. "Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data," The World Economy, Wiley Blackwell, vol. 36(8), pages 1041-1064, August.
    23. Castellacci, Fulvio, 2010. "Firm heterogeneity, international cooperations and export participation," MPRA Paper 27585, University Library of Munich, Germany.
    24. Fernández-Mesa, Anabel & Alegre, Joaquín, 2015. "Entrepreneurial orientation and export intensity: Examining the interplay of organizational learning and innovation," International Business Review, Elsevier, vol. 24(1), pages 148-156.
    25. Fabian Unterlass, 2013. "The relationship between innovation, exports and economic performance. Empirical evidence for 21 EU countries," EcoMod2013 5655, EcoMod.

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    Keywords

    innovation; export; trade; product cycle; German manufacturing firms; Ifo innovation survey;

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