Learning by Exporting: New Insights from Examining Firm Innovation

Abstract

Empirical findings across many nations show that exporters have superior productivity compared to nonexporters and that this relationship is driven by productive firms becoming exporters. The conclusion drawn from these studies is that there is little learning from exporting. We, however, assess if there are ex post benefits that accrue to exporting firms by examining innovation outcomes. We argue that exporters can often access diverse knowledge inputs not available in the domestic market, that this knowledge can spill back to the focal firm, and that such learning can foster increased innovation. We examine product innovation and patent application counts of a representative sample of Spanish manufacturing firms from 1990 to 1997. To conduct the analysis, we use a nonlinear GMM estimator for exponential models with panel data that allows for predetermined regressors and linear feedback. We find that exporting is associated with innovation. Moreover, the panel data allow us to explore the temporal relationship between exporting and innovation. In contrast to existing findings, we find evidence of learning by exporting-albeit in dimensions not previously examined in the literature.

Explaining intermittent exporting: Exit and conditional re-entry in export markets

“…There is evidence that experience of exporting helps firms to learn about and overcome the difficulties of operating in foreign markets (Salomon & Shaver, 2005;Love & Ganotakis, 2013;Sui & Baum, 2014). In particular, the past experience of exporting reduces the uncertainty associated with re-entering export markets and helps firms lower the sunk cost associated with re-entry.…”

“…There is ample macro-level evidence that exports can be motivated both by improved global trade condition and by domestic crisis or depression (Greenaway & Kneller, 2007). Indeed, Salomon and Shaver (2005) argue that export sales and domestic sales should be determined simultaneously: their relationship is interdependent rather than independent. In a similar vein, Belke, Oeking, and Setzer (2015) argue that under certain conditions, firms consider export activity as a substitute for serving domestic demand.…”

On firms’ product space evolution: the role of firm and local product relatedness

“…On the one hand, importers may access new, better quality and more suitable inputs (Krishnan and Ulrich, 2001;Goldberg et al, 2009;Colantone and Crino`, 2014). On the other hand, exporters may dramatically be pushed to innovate by their own foreign customers (Egan and Mody, 1992;Goh, 2005;Salomon and Shaver, 2005;Baldwin and von Hippel, 2011;Hahn and Park, 2011;Bratti and Felice, 2012;Lo Turco and Maggioni, 2015). Foreign-owned firms, then, besides being more export and import intensive, may further benefit from technological spillovers from their headquarters and from the availability of intra-group financial resources (Desai et al, 2004(Desai et al, , 2008.…”

Firm survival: The role of incubators and business characteristics

“…Bearing in mind the pressures and complexities that come with international competition (Pearce and Robbins, 2008), export firms tend to have particular characteristics (greater productivity and efficiency, a higher degree of innovation, etc.) that increase their survival potential in comparison to non-export firms (Helpman, 2006;Salomon and Shaver, 2005). So internationalization has a favorable impact on growth and firm survival.…”