Exports and Innovation in Emerging Economies

Firm-Level Evidence from South-Africa

Research output: Working paperOther research output

239 Downloads (Pure)

Abstract

Using a new dataset on the innovation and exports of 500 South African firms, this paper asks whether exports affect rm innovation in the context of an emerging economy.
We use a range of particularly attractive features of the dataset. Firms not only report whether they innovated but describe their innovation - which reduces measurement error - and provide extensive information on their other links with foreign countries or firms. We conrm that product innovation is strongly associated with exports, even though other measures of innovation are not (e.g. process innovation). Exporters typically report very different reasons to innovate than non-exporters, which suggests that exporting provides additional incentives to innovate, and that the causality runs at least partly from exporting to innovating. Instrumenting the export status of a firm using its distance from the nearest port or airport, we however do not find any statistically signicant relationship between exports and innovation in the second stage. We conclude
that, even though exports seem to causally raise innovation through some channels, the quantitative effects appear too weak to be captured by an instrument that is not extremely powerful.
Original languageEnglish
Place of PublicationTilburg
PublisherTilburg University
Number of pages26
Publication statusPublished - Dec 2015

Publication series

NameDFID Working Paper

Fingerprint

Innovation
Emerging economies
South Africa
Exporting
Process innovation
Exporters
Causality
Africa
Product innovation
Incentives
Airports
Measurement error

Cite this

@techreport{23c6711fac064c9abd9bcabe16037f7a,
title = "Exports and Innovation in Emerging Economies: Firm-Level Evidence from South-Africa",
abstract = "Using a new dataset on the innovation and exports of 500 South African firms, this paper asks whether exports affect rm innovation in the context of an emerging economy.We use a range of particularly attractive features of the dataset. Firms not only report whether they innovated but describe their innovation - which reduces measurement error - and provide extensive information on their other links with foreign countries or firms. We conrm that product innovation is strongly associated with exports, even though other measures of innovation are not (e.g. process innovation). Exporters typically report very different reasons to innovate than non-exporters, which suggests that exporting provides additional incentives to innovate, and that the causality runs at least partly from exporting to innovating. Instrumenting the export status of a firm using its distance from the nearest port or airport, we however do not find any statistically signicant relationship between exports and innovation in the second stage. We concludethat, even though exports seem to causally raise innovation through some channels, the quantitative effects appear too weak to be captured by an instrument that is not extremely powerful.",
author = "Gonzague Vannoorenberghe",
note = "Co-ordinated Country Case Studies: Innovation and Growth Raising Productivity in Developing Countries",
year = "2015",
month = "12",
language = "English",
series = "DFID Working Paper",
publisher = "Tilburg University",
type = "WorkingPaper",
institution = "Tilburg University",

}

Exports and Innovation in Emerging Economies : Firm-Level Evidence from South-Africa. / Vannoorenberghe, Gonzague.

Tilburg : Tilburg University, 2015. (DFID Working Paper).

Research output: Working paperOther research output

TY - UNPB

T1 - Exports and Innovation in Emerging Economies

T2 - Firm-Level Evidence from South-Africa

AU - Vannoorenberghe, Gonzague

N1 - Co-ordinated Country Case Studies: Innovation and Growth Raising Productivity in Developing Countries

PY - 2015/12

Y1 - 2015/12

N2 - Using a new dataset on the innovation and exports of 500 South African firms, this paper asks whether exports affect rm innovation in the context of an emerging economy.We use a range of particularly attractive features of the dataset. Firms not only report whether they innovated but describe their innovation - which reduces measurement error - and provide extensive information on their other links with foreign countries or firms. We conrm that product innovation is strongly associated with exports, even though other measures of innovation are not (e.g. process innovation). Exporters typically report very different reasons to innovate than non-exporters, which suggests that exporting provides additional incentives to innovate, and that the causality runs at least partly from exporting to innovating. Instrumenting the export status of a firm using its distance from the nearest port or airport, we however do not find any statistically signicant relationship between exports and innovation in the second stage. We concludethat, even though exports seem to causally raise innovation through some channels, the quantitative effects appear too weak to be captured by an instrument that is not extremely powerful.

AB - Using a new dataset on the innovation and exports of 500 South African firms, this paper asks whether exports affect rm innovation in the context of an emerging economy.We use a range of particularly attractive features of the dataset. Firms not only report whether they innovated but describe their innovation - which reduces measurement error - and provide extensive information on their other links with foreign countries or firms. We conrm that product innovation is strongly associated with exports, even though other measures of innovation are not (e.g. process innovation). Exporters typically report very different reasons to innovate than non-exporters, which suggests that exporting provides additional incentives to innovate, and that the causality runs at least partly from exporting to innovating. Instrumenting the export status of a firm using its distance from the nearest port or airport, we however do not find any statistically signicant relationship between exports and innovation in the second stage. We concludethat, even though exports seem to causally raise innovation through some channels, the quantitative effects appear too weak to be captured by an instrument that is not extremely powerful.

M3 - Working paper

T3 - DFID Working Paper

BT - Exports and Innovation in Emerging Economies

PB - Tilburg University

CY - Tilburg

ER -