Why Do Some Firms Persistently Outperform Others? An Investigation of the Interactions between Innovation and Export Strategies

RIETI Discussion Paper Series 10-E-037, 2010

50 Pages Posted: 27 Mar 2018

See all articles by Keiko Ito

Keiko Ito

Senshu University - School of Economics

Sebastien Lechevalier

Ecole des Hautes Etudes en Sciences Sociales (EHESS)

Date Written: March 22, 2018

Abstract

Although heterogeneity in the performance of firms is a well-established stylized fact, we still lack full understanding of its origins and the reasons why it persists. Instead of assuming that performance differences are exogenous, this paper focuses on two endogenous strategies - innovation and global engagement - and interprets them as two ways to accumulate knowledge and improve firms' capabilities. We are particularly interested in analyzing interactions between these strategies and their effect on firms' performance. By using a firm-level panel dataset drawn from a Japanese large-scale administrative survey for the years 1994 - 2003, we first find that innovation and exporting strategies are characterized by complementarities, which define coherent productive models or patterns of learning. Second, we show that these different strategies lead to various performances in terms of productivity and survival. Third, by using a propensity score matching approach, we show that these differences in performance are lasting. Overall, our paper shows that the interaction of innovation and export investments is a source of permanent differences in performance among firms.

Suggested Citation

Ito, Keiko and Lechevalier, Sebastien, Why Do Some Firms Persistently Outperform Others? An Investigation of the Interactions between Innovation and Export Strategies (March 22, 2018). RIETI Discussion Paper Series 10-E-037, 2010, Available at SSRN: https://ssrn.com/abstract=3146995 or http://dx.doi.org/10.2139/ssrn.3146995

Keiko Ito

Senshu University - School of Economics ( email )

Kanagawa 214-8580
Japan

Sebastien Lechevalier (Contact Author)

Ecole des Hautes Etudes en Sciences Sociales (EHESS) ( email )

54, boulevard Raspail
Paris, 75006
France

HOME PAGE: http://https://sebastienlechevalier.wordpress.com/

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