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'Learning to export’ and ‘learning to innovate’: Revisiting the relationship between innovation and exports in African firms

Author

Listed:
  • Elvis Korku Avenyo

    (University of Johannesburg)

  • Fiona Tregenna

    (University of Johannesburg)

  • Kwanele Ngwadleka

    (University of Johannesburg)

Abstract

This paper examines the relationship between innovation and export performance for African firms. We use Tobit simultaneous equation full information maximum likelihood (FIML) model with selection on a cross-sectional dataset from the World Bank’s Enterprise Surveys for 28 African economies. The paper provides new evidence of a two-way positive relationship between innovation and export performance in African firms: innovation is important for both the ability to export (export propensity) and for export intensity, while exporting also increases the likelihood of innovating. These effects are driven mainly by direct exports and apply to both product and process innovation. We argue that these results point to a two-way relationship in which innovation enables firms to ‘learn to export’, while firms also ‘learn to innovate’ through exporting. A higher share of foreign ownership in firms, as well as firms having an internationally recognised quality certification strengthen the positive effects in both directions.

Suggested Citation

  • Elvis Korku Avenyo & Fiona Tregenna & Kwanele Ngwadleka, 2021. "'Learning to export’ and ‘learning to innovate’: Revisiting the relationship between innovation and exports in African firms," ERSA Working Paper Series 56, Economic Research Southern Africa.
    • Handle: RePEc:rza:ersawp:56
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    File URL: https://ersawps.org/index.php/working-paper-series/article/view/56/40
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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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