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

Author

Listed:
  • 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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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp204.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. repec:tei:journl:v:11:y:2017:i:1:p:34-41 is not listed on IDEAS
    3. repec:afe:journl:v:19:y:2017:i:1:p:133-160 is not listed on IDEAS
    4. Cié Fatou & 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).
    5. repec:afe:journl:v:19:y:2017:i:1:p:113-131 is not listed on IDEAS
    6. repec:eee:chieco:v:44:y:2017:i:c:p:1-15 is not listed on IDEAS
    7. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, Elsevier.
    8. 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.

    More about this item

    Keywords

    Firm heterogeneity; innovation; exporting; productivity; matching;

    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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