Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 296: Learning and Productivity of Swedish Exporting Firms: The importance of Innovation Efforts and the Geography of Innovation

Hans Lööf () and Pardis Nabavi ()
Additional contact information
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Pardis Nabavi: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

Abstract: This paper is concerned with the productivity and growth of Swedish exporting firms. Using data on 9,580 manufacturing firms with 10 or more employees for the period 1997-2008, it estimates a dynamic GMM model that captures both the impact of recurrent knowledge investment through innovation and potential spillovers from the local milieu. The majority of the exporting firms are non-innovative. The data reveal that patent applicants located in knowledge intense milieus account for almost 40 percent of total Swedish exports, but only 2 percent of the firms. From the regressions it is shown that, relative to a firm that does not engage in innovation and has scarce access to external knowledge, the level of productivity is 2-12 percent higher for an innovative firm, depending on how innovation is defined and where the innovator is located. The annual long-run growth rate is 0.2-0.7 higher for innovative firms. Moreover, the performance gap between innovative and non-innovative exporters increases with accessibility to external knowledge for the former.

Keywords: Productivity; exports; innovation; geographical knowledge spillovers; panel data

JEL-codes: C23; F14; L25; O31; R32

26 pages, January 17, 2013

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