Knowledge, Technology and Internationalization
New Horizons in Regional Science series
Edited by Charlie Karlsson, Urban Gråsjö and Sofia Wixe
Chapter 12: Closing the gap: empirical evidence on firms’ innovation, productivity and exports
It is well known that exporters are productive firms, but the source of their productivity is left unexplained. This chapter aims to endogenize the productivity heterogeneity of exporting firms by incorporating innovation in a structural model framework. In doing so, we close the gap between the innovation–productivity and productivity–export literature. Two waves of the Swedish Community Innovation Survey (CIS) are merged. This allows for a setup that takes into account the links from innovation input to innovation output and also from innovation output to productivity and exports. The main findings highlight that exporters are productive firms with innovation output in the past, which in turn was driven by prior R & D and other innovation activity investments.
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