Exports and innovation: the role of heterogeneity in exports

This paper examines whether and how heterogeneity in exports affects firms’ innovations in China. Using comprehensive transaction-level trade data from China Customs to construct various dimensional measures exports, empirical results obtained from a matched firm-transaction panel data find that exp...

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Bibliographic Details
Published in:Empirical economics 2018-11, Vol.55 (3), p.1065-1087
Main Author: Yang, Chih-Hai
Format: Article
Language:English
Subjects:
Diversification
Econometrics
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Exports
Finance
Heterogeneity
Innovations
Insurance
Management
Panel data
R&D
Research & development
Sales
Statistics for Business
Tariffs
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Summary:This paper examines whether and how heterogeneity in exports affects firms’ innovations in China. Using comprehensive transaction-level trade data from China Customs to construct various dimensional measures exports, empirical results obtained from a matched firm-transaction panel data find that exports overall have a positive impact on promoting innovations in terms of R&D and new product sales. The innovation-enhancing effect of exports depends on the heterogeneity in exports. Firms with greater varieties of exports, more market diversification, and higher export quality are associated with a higher R&D propensity and more new product sales, while process exports are found a negative association with innovations.
ISSN:0377-7332
1435-8921
DOI:10.1007/s00181-017-1312-8