Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles

Lachenmaier, Stefan und Wößmann, Ludger (2004): Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles. CESifo Working Paper,

Abstract

Trade and growth theories predict a mutual causation of innovation and exports. We test empirically whether innovation causes exports using a uniquely rich German micro dataset. Our instrumental-variable strategy identifies variation in innovative activity that is caused by specific impulses and obstacles reported by the firms, which can reasonably be viewed as exogenous to firms� export performance. We find that innovation attributable to this variation leads to an increase of roughly 7 percentage points in the export share of German manufacturing firms. The evidence is robust to several alternative specifications, similar for product and process innovations, and heterogeneous across sectors.

• Item Type: Paper
• Faculties: Economics; Economics > Chairs > CESifo-Professorship for Empirical Innovation Economics
• Subjects: 300 Social sciences > 330 Economics
• Language: English