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Product and process innovation and the decision to export : firm-level evidence for Belgium

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  • VAN BEVEREN, Ilke

    () (Katholieke Universiteit Leuven, LICOS and Lessuis, Antwerpen, Belgium)

  • VANDENBUSSCHE, Hylke

    () (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium and KULeuven, LICOS, B- 3000 Leuven, Belgium)

Abstract

Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that the combination of product and process innovation, rather than either of the two in isolation, increases a firm’s probability to enter the export market. After controlling for potential endogeneity of the innovation activities, only firms with a sufficiently high probability to start exporting engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation

Suggested Citation

  • VAN BEVEREN, Ilke & VANDENBUSSCHE, Hylke, 2009. "Product and process innovation and the decision to export : firm-level evidence for Belgium," CORE Discussion Papers 2009086, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2009086
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    File URL: http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp209_86web.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Davide Castellani & Antonello Zanfei, 2006. "Multinational Firms, Innovation and Productivity," Books, Edward Elgar Publishing, number 3709.
    3. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-394, October.
    4. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
    5. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
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    Cited by:

    1. Dahai Fu & Yanrui Wu & Yihong Tang, 2012. "Does Innovation Matter for Chinese High-Tech Exports? A Firm-Level Analysis," Frontiers of Economics in China, Higher Education Press, vol. 7(2), pages 218-245, June.
    2. Keiko ITO, 2012. "Sources of Learning-by-Exporting Effects: Does Exporting Promote Innovation?," Working Papers DP-2012-06, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Kawtar Dkhissi, 2014. "Impact des accords de libre échange sur la propension et l'intensité des exportations des entreprises au Maroc," Post-Print hal-01335587, HAL.

    More about this item

    Keywords

    exports; product innovation; process innovation; self-selection; firm heterogeneity;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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