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Product and Process Innovation and the Decision to Export: Firm-Level Evidence for Belgium

LICOS Discussion Paper No. 247/2009

32 Pages Posted: 25 Nov 2009  

Ilke Van Beveren

KULeuven, Department of Economics; KULeuven, CES; UCL, Department of Economics, IRES

Hylke Vandenbussche

Catholic University of Leuven (KUL), LICOS & CEPR

Date Written: November, 24 2009

Abstract

Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that the combination of product and process innovation, rather than either of the two in isolation, increases a firm’s probability to enter the export market. After controlling for potential endogeneity of the innovation activities, only firms with a sufficiently high probability to start exporting engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation.

Keywords: Product innovation, Process innovation, Self-selection, Firm heterogeneity

JEL Classification: D24, F14, L25, O31, O33

Suggested Citation

Van Beveren, Ilke and Vandenbussche, Hylke, Product and Process Innovation and the Decision to Export: Firm-Level Evidence for Belgium (November, 24 2009). LICOS Discussion Paper No. 247/2009. Available at SSRN: https://ssrn.com/abstract=1512427 or http://dx.doi.org/10.2139/ssrn.1512427

Ilke Van Beveren (Contact Author)

KULeuven, Department of Economics ( email )

Leuven, B-3000
Belgium

HOME PAGE: http://econ.kuleuven.be/eng/fetew/medewerker/Userpage.aspx?PID=1318

KULeuven, CES ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

HOME PAGE: http://econ.kuleuven.be/eng/fetew/medewerker/Userpage.aspx?PID=1318

UCL, Department of Economics, IRES ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Hylke Vandenbussche

Catholic University of Leuven (KUL), LICOS & CEPR ( email )

Faculty of Economics
Naamsestraat 69
B-3000 Leuven, 3000
Belgium
+32 16 326 920 (Phone)
+32 16 326 732 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/public/NDBAD40/

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