The Link between Innovation and Export: Evidence from Australia's Small and Medium Enterprises

Abstract

This paper investigates the direction of causality between export market participation and innovation using firm level data from Australia. Using the propensity score matching approach, the paper asks whether: (i) exporting in the current period is positively correlated with the probability to innovate in the same or the next period, (ii) the relationship in (i) is true for firms who have no export market participation in the previous period, (iii) innovating in the current period leads to export market participation in the same or the next period, and (iv) the relationship in (iii) is true for firms who have no innovation in the previous period. The paper finds a statistically and economically significant positive correlation between export and innovation in the current period. Furthermore, with regards to the direction of causality, there is evidence that it runs both ways for process innovation particularly for the services sector. For product innovation, there is evidence that current product innovator may lead to a higher probability of becoming enew f exporter in the current period.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 19 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.