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Product and Process Innovation and the Decision to Export: Firm-level Evidence for Belgium

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  • Ilke Van Beveren
  • Hylke Vandenbussche

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 firmç’¤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

  • 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.
  • Handle: RePEc:lic:licosd:24709
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp247.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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. 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).
    2. 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.
    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.

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    More about this item

    Keywords

    Exports; Product innovation; Process innovation; Self-selection; Firm heterogeneity;
    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
    • 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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