Chapter 7: Export Strategy and Innovation
* INTRODUCTION While exporting and ﬁrm capabilities may individually and/or jointly impact innovation, substantial heterogeneity exists in export strategies. All ﬁrms do not export in the same manner, nor do they export to the same location. As one would expect, these strategies have implications for performance. This chapter explores how exporting strategies aﬀect knowledge ﬂows and thereby inﬂuence innovative productivity. It also assesses whether knowledge assimilation capabilities moderate the impact of export strategies on innovation. 7.2 SPILLOVER HETEROGENEITY AMONG EXPORT STRATEGIES Grossman and Helpman (1991) argue that the number of foreign contacts possessed aﬀects the amount of information transferred back to the home country. As one country becomes inextricably tied to another, its ties become more direct, and more knowledge is likely to permeate the boundaries. Therefore, the extent to which a country is tied to another through trade aﬀects the amount of knowledge that spills over: the ‘stock of knowledge capital’ – will be related to the number of contacts that local agents have with their counterparts in the international research and business communities. The number of contacts most probably increases with the extent of commercial exchange (p. 1) the extent of the spillovers between two countries will increase with the volume of their bilateral trade. (pp. 4–5) The same argument can be applied at the ﬁrm level. In the strategy literature, for example, scholars have long argued that frequency and intensity of interaction can inﬂuence knowledge exchange. In the absence of frequent and intense...
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