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Closing the Gap: An Empirical Evidence on Firm’s Innovation, Productivity, and Exports

  • Tavassoli, Sam

    ()

    (CSIR, Blekinge Inst of Technology)

  • Jienwatcharamongkhol, Viroj

    ()

    (Department of Economics, Lund University, Sweden)

It is well known that exporters are productive firms. But the source of their productivity is left unexplained. This paper aims to endogenize the productivity heterogeneity of exporting firms by incorporating innovation in a structural model framework. In doing so, we close the gap between the innovation-productivity and productivity-export literature. Two waves of Swedish Community Innovation Survey (CIS) are merged. This allows for a setup that takes into account the links from innovation input to innovation output and also from innovation output to productivity and exports. The main findings highlight that exporters are productive firms with innovation output in the past, which in turn was driven by prior R&D and other innovation activity investments.

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Paper provided by Center for Innovation and Technology Research, Blekinge Institute of Technology in its series CITR Working Paper Series with number 2014/06.

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Length: 28 pages
Date of creation: 01 Jun 2014
Date of revision:
Handle: RePEc:hhs:bthcsi:2014-006
Contact details of provider: Postal: CITR (Center for Innovation and Technology Research), Department of Industrial Economics, Blekinge Inst of Technology, 371 79 Karlskrona, Sweden
Phone: 0455 - 38 50 00
Fax: 0455 - 38 50 57
Web page: http://www.bth.se/csir
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  1. Long, Ngo Van & Raff, Horst & Stähler, Frank, 2011. "Innovation and trade with heterogeneous firms," Journal of International Economics, Elsevier, vol. 84(2), pages 149-159, July.
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  4. Ariel Pakes & Zvi Griliches, 1984. "Patents and R&D at the Firm Level: A First Look," NBER Chapters, in: R&D, Patents, and Productivity, pages 55-72 National Bureau of Economic Research, Inc.
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  7. Pierre Mohnen & Jacques Mairesse & Marcel Dagenais, 2006. "Innovativity: A Comparison Across Seven European Countries," CIRANO Working Papers 2006s-11, CIRANO.
  8. Segerstrom, Paul & Stepanok, Ignat, 2010. "Learning How to Export," SSE/EFI Working Paper Series in Economics and Finance 0727, Stockholm School of Economics, revised 14 Dec 2010.
  9. Bernard, A. & Wagner, J., 1996. "Exports and Success in German Manufacturing," Working papers 96-10, Massachusetts Institute of Technology (MIT), Department of Economics.
  10. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
  11. Tor Jakob Klette & Samuel Kortum, 2004. "Innovating Firms and Aggregate Innovation," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 986-1018, October.
  12. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
  13. Martin Andersson & Hans Lˆˆf, 2009. "Learning-by-Exporting Revisited: The Role of Intensity and Persistence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 893-916, December.
  14. Alfred Kleinknecht & Kees Van Montfort & Erik Brouwer, 2002. "The Non-Trivial Choice between Innovation Indicators," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(2), pages 109-121.
  15. Brouwer, Erik & Kleinknecht, Alfred, 1997. "Measuring the unmeasurable: a country's non-R&D expenditure on product and service innovation," Research Policy, Elsevier, vol. 25(8), pages 1235-1242, January.
  16. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March.
  17. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  18. Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  19. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 317-344.
  20. R. Antonietti & G. Cainelli, 2009. "The role of spatial agglomeration in a structural model of innovation, productivity and export," Working Papers Prin 007, Dipartimento Scienze Economiche, Universita' di Bologna.
  21. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  22. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
  23. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
  24. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, vol. 57(2), pages 397-422, August.
  25. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
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