Innovation and exporting: The case of mediation effects in Sub-Saharan Africa

This study investigates the mechanisms accounting for the two-way relationship between innovation and exporting in sub-Saharan Africa. We hypothesise that the relation between innovation and subsequent exporting is mediated by market investment. We also hypothesise that customer feedback mediates the relation between exporting and subsequent innovation. We test these hypotheses using repeated cross-sectional data from the 2006/07 and 2013 World Bank Enterprise Surveys. We also use data from the 2013 Innovation Follow-up survey. We indeed find that market investment mediates the effect of innovation on subsequent exporting and that customer feedback mediates the effect of exporting on subsequent innovation. We conclude that innovation policies aimed at fostering novel product innovation may be important for creating a new market space on the export market. Furthermore, investment in information and communications technology infrastructure is likely to enhance faster response to market needs.