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From innovation to exporting or vice versa? Causal link between innovation activity and exporting in Slovenian microdata

Author

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  • Joze P. Damijan
  • Crt Kostevc
  • Saso Polanec

Abstract

Firm productivity and export decision are closely related to its innovation ac- tivity. Product innovation may play a more important role in the decision to start exporting, while the decision for process innovation may be triggered by success- ful exporting. This suggests that the causality between innovation and exporting may run from product innovation to exporting and conesequently from exporting to process innovation and reverse productivity improvements. Using detailed mi- crodata, including innovation survey, industrial production survey and information on trade, for Slovenian firms in 1996-2002 we investigate this dual causal relation- ship between firms' innovation and exporting activity. We find no evidence for the hypothesis that either product or process innovations increase the probability of becoming a first time exporter, but find consistent support both in the innovation survey as well as in the industrial production survey that exporting does lead to pro- ductivity improvements. These, however, are likely to be related to process rather than product innovations and are limited to a sample of medium and large sized first time exporters only.

Suggested Citation

  • Joze P. Damijan & Crt Kostevc & Saso Polanec, 2008. "From innovation to exporting or vice versa? Causal link between innovation activity and exporting in Slovenian microdata," LICOS Discussion Papers 20408, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    • Handle: RePEc:lic:licosd:20408
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    2. Małgorzata Stefania Lewandowska & Tomasz Golebiowski & Malgorzata Roszkiewicz, 2022. "Eco-innovation, International Competitiveness and Economic Performance of European Union Enterprises: Triangle Approach," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 635-645.
    3. Martin Andersson & Hans Lööf, 2009. "Learning‐by‐Exporting Revisited: The Role of Intensity and Persistence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 893-916, December.
    4. Fatou Cisse, 2017. "Do Firms Learn by Exporting or Learn to Export? Evidence from Senegalese Manufacturing Firms," Journal of African Development, African Finance and Economic Association (AFEA), vol. 19(1), pages 133-160.
    5. Fatou Cissé & Ji Eun Choi, 2015. "Do firms learn by exporting or learn to export? Evidence from Senegalese manufacturing plant," WIDER Working Paper Series 057, World Institute for Development Economic Research (UNU-WIDER).
    6. Ilke Van Beveren & Hylke Vandenbussche, 2010. "Product and process innovation and firms' decision to export," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 3-24.
    7. Ehouman Williams V. Ahouakan & M'Baye Diene, 2017. "Does School Quality Matter? Primary Schools Characteristics and Child Labour Intensity in Senegal," Journal of African Development, African Finance and Economic Association (AFEA), vol. 19(1), pages 113-131.
    8. Huang, Youxing & Zhang, Yan, 2017. "How does outward foreign direct investment enhance firm productivity? A heterogeneous empirical analysis from Chinese manufacturing," China Economic Review, Elsevier, vol. 44(C), pages 1-15.
    9. Victoria Golikova & Ksenia Gonchar & Boris Kuznetsov, 2011. "Entry into Export Markets as an Incentive to Innovate. Evidence from the Russian Manufacturing Industry Survey," HSE Working papers WP BRP 11/EC/2011, National Research University Higher School of Economics.
    10. Veland Ramadani & Hyrije Abazi-Alili & Léo-Paul Dana & Gadaf Rexhepi & Sadudin Ibraimi, 2017. "The impact of knowledge spillovers and innovation on firm-performance: findings from the Balkans countries," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 299-325, March.
    11. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    12. Lopez, Carmen & Yacine Haddoud, Mohamed & Kasturiratne, Dulekha, 2022. "Revisiting the innovation–export entry link through a configuration approach," Journal of Business Research, Elsevier, vol. 149(C), pages 927-937.
    13. Voulgaris, Fotini & Lemonakis, Christos, 2014. "Competitiveness and profitability: The case of chemicals, pharmaceuticals and plastics," The Journal of Economic Asymmetries, Elsevier, vol. 11(C), pages 46-57.
    14. Esra Balli & Çiler Sigeze, 2017. "The Nexus Between Research And Development And Export Decision: The Case Of Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 11(1), pages 34-41, December.
    15. Priit Vahter, 2011. "Learning By Exporting: Evidence Based on Data of Knowledge Flows from Innovation Surveys in Estonia," William Davidson Institute Working Papers Series wp1011, William Davidson Institute at the University of Michigan.
    16. Ilke Van Beveren & Hylke Vandenbussche, 2009. "Product and Process Innovation and the Decision to Export: Firm-level Evidence for Belgium," LICOS Discussion Papers 24709, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    17. Castellacci, Fulvio, 2010. "Firm heterogeneity, international cooperations and export participation," MPRA Paper 27585, University Library of Munich, Germany.
    18. Fatou Cissé & Ji Eun Choi, 2015. "Do Firms Learn by Exporting or Learn to Export?: Evidence from Senegalese Manufacturing Plant," WIDER Working Paper Series wp-2015-057, World Institute for Development Economic Research (UNU-WIDER).
    19. ITO Keiko & LECHEVALIER Se'bastien, 2010. "Why Do Some Firms Persistently Outperform Others? An investigation of the interactions between innovation and export strategies," Discussion papers 10037, Research Institute of Economy, Trade and Industry (RIETI).
    20. Arta Mulliqi & Nick Adnett & Mehtap Hisarciklilar & Artane Rizvanolli, 2018. "Human Capital and International Competitiveness in Europe, with Special Reference to Transition Economies," Eastern European Economics, Taylor & Francis Journals, vol. 56(6), pages 541-563, November.
    21. Ramadani, Veland & Hisrich, Robert D. & Abazi-Alili, Hyrije & Dana, Léo-Paul & Panthi, Laxman & Abazi-Bexheti, Lejla, 2019. "Product innovation and firm performance in transition economies: A multi-stage estimation approach," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 271-280.
    22. Małgorzata Stefania Lewandowska & Tomasz Gołębiowski, 2012. "Complementarity Between Process and Organizational Innovation of Polish Exporters," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 29-55.
    23. Werner Hölzl & Jürgen Janger & Andreas Reinstaller & Isabel Stadler & Fabian Unterlass & Stephanie Daimer & Thomas Stehnken, 2010. "Barriers to Internationalisation and Growth of EU's Innovative Companies. PRO INNO Europe: INNO-Grips II Report," WIFO Studies, WIFO, number 41059, April.

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    More about this item

    Keywords

    Firm heterogeneity; innovation; exporting; productivity; matching;
    All these keywords.

    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
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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