Innovation and export behaviour at the firm level

Abstract

This paper considers the role of innovation in determining export behaviour for a sample of UK firms including both innovating and non-innovating firms. Export behaviour is defined both as the probability of a firm exporting and the propensity to export of the exporting firms. An empirical model of the determinants of export behaviour is estimated, and the determinants are found to vary between innovating and non-innovating firms. Non-innovative firms are found to be more likely to export than innovative firms of the same size. However, the number of past innovations has a positive impact on the probability of an innovative firm exporting. The paper concludes that the capacity to innovate changes the behaviour of the firm relative to non-innovating firms.