Scandinavian Working Papers in Economics

Working Papers,
Blekinge Institute of Technology, Department of Industrial Economics

No 2013/05: The Role of Product Innovation Output on Export Behavior of Firms

Sam Tavassoli ()
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Sam Tavassoli: CSIR, Blekinge Inst of Technology, Postal: CSIR, School of Management, Blekinge Inst of Technology, 371 79 Karlskrona, Sweden

Abstract: This paper analyzes the role of innovation on the export behavior of firms. Using two waves of Swedish CIS data merged with register data on firm-specific characteristics. I estimate the influence of the innovation output of a firm on its export propensity and intensity, respectively. I find that the innovation output of firms (measured as sales due to innovative products) has a positive and significant effect on export behavior of firms. The results also show that it is indeed innovation output, rather than innovation input (innovative efforts), that matters for export behavior of firms. Specifically, innovation output leads to increase in later export propensity and intensity of firms. Moreover, there is also strong association of productivity and ownership structure of firms with export propensity and intensity of firms. The results are robust when unobserved time-invariant heterogeneity of firm and also potential endogeneity of innovation-export are taken into accounted.

Keywords: Innovation output; innovation input; export propensity; export intensity

JEL-codes: F14; O31; O33

32 pages, December 3, 2013

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