Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2015/17: Export-led innovation: the role of export destinations

Claudio Fassio ()
Additional contact information
Claudio Fassio: CIRCLE, Lund University

Abstract: This paper investigates the effect of exporting activities on the innovation strategies of firms in France, Germany, Italy, Spain and UK. It puts forward the hypothesis that the positive effect usually found in the related literature is driven by two main mechanisms. The first is a technological learning effect that allows firms active in international markets to benefit from foreign knowledge spillovers in technologically advanced markets and decrease their research cost for the development of innovations. The second is a foreign demand effect according to which the increase of demand induced by the access to foreign markets increases also the profitability of introducing innovations. The paper uses firm-level information about the export destinations of exporters and creates two indices to proxy the two effects, using respectively foreign R&D intensity and foreign growth of imports of the countries of destination of exports, measured at the sectoral level. The empirical analysis, which takes into account possible endogeneity issues related with the firms’ strategic choice of the markets of destination, shows that the two effects induce the adoption of different innovation strategies: while the technological learning effect increases mainly the incentives to introduce brand new product innovations, the foreign demand effect fosters the adoption of efficiency strategies.

Keywords: Export activity; Innovation strategies; Destination of exports; International Spillovers; International demand

JEL-codes: F10; O33; P51

35 pages, May 14, 2015

Full text files

201517_Fassio.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Torben Schubert ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:35:12.