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 6: Learning by Exporting

Robert Salomon

Subjects: business and management, international business


* INTRODUCTION This and the following chapters test a number of formal hypotheses, considering both the individual and combined effects of exporting and a firm’s idiosyncratic ability to absorb and assimilate knowledge on innovative outcomes. The objective is to gain insight into the effect of exporting on firms’ innovative productivity. The basic assertion is that foreign market contact provides exporting firms with exposure to external knowledge inputs that domestic firms lack and that these inputs inform innovative output. This chapter specifically addresses the main effect of exporting on innovation to assess whether firms learn by exporting. I then condition the analysis to examine the combined effect of exporting and firm-specific competences (for example, absorptive capacity) on firms’ innovative outcomes. Subsequent chapters systematically explore the individual sources from which exporters may derive knowledge-based advantages. 6.2 FOREIGN MARKET CONTACT Scholars have long argued that externally acquired knowledge may drive innovation (for example, von Hippel, 1988). In fact, von Hippel (1988) suggests that firms that reach outside their boundaries for knowledge perform more effectively. To be sure, existing research suggests that under certain conditions firms engaging in FDI may acquire technologies, technological skills and other capabilities by investing abroad (for example, Kogut and Chang, 1991; Almeida, 1996; Penner-Hahn and Shaver, 1999). However, we know very little about whether firms can absorb knowledge outside their national boundaries without making such cross-border investments. With regard to exporting, Grossman and Helpman (1991, 1993) have argued that trade may expose the...

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