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Direction of Causality in Innovation-Exporting Linkage: Evidence on Korean Manufacturing

  • Chin Hee HAHN

    (Chin Hee HAHN Kyungwon University)

  • Chang-Gyun PARK

    (Chang-Gyun PARK Chung-Ang University)

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    This paper examines various possible bi-directional causal relationships among exporting, innovation, and productivity utilizing plant-level data on Korean manufacturing. Based on both propensity score matching technique and three-variable panel VAR estimation, we find a significantly positive effect of exporting on new product introduction. The effect for the other direction of causality is estimated to be positive but not significant. Panel VAR estimation results suggest that plant productivity has a significantly positive effect on both exporting and new product introduction.

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    File URL: http://www.eria.org/ERIA-DP-2012-07.pdf
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    Paper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number DP-2012-07.

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    Length: 39 pages.
    Date of creation: 01 Jun 2012
    Date of revision:
    Handle: RePEc:era:wpaper:dp-2012-07
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    1. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2007. "Comparative Advantage and Heterogeneous Firms," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 31-66.
    2. Andrew B. Bernard & Stephen Redding & Peter K. Schott, 2006. "Multi-Product Firms and Trade Liberalization," CEP Discussion Papers dp0769, Centre for Economic Performance, LSE.
    3. Ebling, Günther & Janz, Norbert, 1999. "Export and innovation activities in the German service sector: empirical evidence at the firm level," ZEW Discussion Papers 99-53, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Robert Feenstra & Madani & Dorsati & Yang & Tzu-Han, and Liang, Chi-Yuan, 2003. "Testing Endogenous Growth In South Korea And Taiwan," Working Papers 9716, University of California, Davis, Department of Economics.
    5. Bee Yan Aw & Mark J. Roberts & Daniel Yi Xu, 2009. "R&D Investment, Exporting, and Productivity Dynamics," NBER Working Papers 14670, National Bureau of Economic Research, Inc.
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