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Discussion Paper Details

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Title: Product and Process Innovation and Firms? decision to Export

Author(s): Ilke Vanbeveren and Hylke Vandenbussche

Publication Date: June 2010

Keyword(s): Exports, Process innovation, Product innovation, R&D and Self-selection

Programme Area(s): International Trade and Regional Economics

Abstract: We analyze the relationship between firm-level innovation activities and firms? propensity to start exporting for firms in a small open economy. We measure innovation by innovative effort (R&D) as well as by innovative output (product and process innovation). After carefully correcting for endogeneity and selection issues, the evidence points to firms self-selecting into innovation in anticipation of their entry into export markets, rather than product and process innovation triggering entry into the export market. These results suggest that governments can foster firm-level innovation through trade liberalization.

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Bibliographic Reference

Vanbeveren, I and Vandenbussche, H. 2010. 'Product and Process Innovation and Firms? decision to Export '. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7846