Learning from Exporting

Learning from Exporting

New Insights, New Perspectives

Robert Salomon

This book explores the relationship between exports and productivity. Whilst a body of research indicates that exporters have superior productivity to non-exporters, received wisdom suggests that this is because productive firms became exporters. Robert Salomon approaches this issue from a different angle. He argues that exporters can access diverse knowledge inputs that are not available in the domestic market, and that this knowledge can spill back to the focal firm and, through learning, can foster increased innovation. Therefore, exporting can also make firms more productive.

Chapter 4: Exporting

Robert Salomon

Subjects: business and management, international business

Extract

INTRODUCTION This chapter addresses previous research in the broader exporting and trade literatures to discuss their relevance to the debate regarding exporting and innovation. While exporting is the most widely used firm strategy for international expansion, relatively little is known about this strategy compared to other forms of international expansion (such as FDI). An abundant macroeconomic trade literature analyzes exporting at the national level, but firms, not nations, engage in trade. Although goods flow between nations, tremendous variance exists within nations and industries that are better explained by firm difference (Kravis and Lipsey, 1992). Much of the extant research addresses the antecedents of export behavior rather than examining its consequences. Empirical work generally examines which firms become exporters in an effort to explain how much each firm optimally exports. Researchers studying exporting as a phenomenon generally look at it as an outcome variable, examining solely the unidirectional relationship between some explanatory variables and exporting behavior. Very little research addresses the implications of being an exporter on other firm outcomes (Leonidou et al., 1998). In this book, then, I adopt a different perspective to explore the effect of exporting behavior on firm outcomes, namely on innovation. This chapter begins by examining the extant theory on international trade from a national and firm standpoint. It then reviews the empirical literature on micro-level exporting. Exporting in this context is generally treated as an endogenously selected firm strategy, a view supported by empirical results attained by scholars pursuing this line...

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