This article analyzes the effect of exporting activity on the innovative performances of firms in France, Germany, Italy, Spain, and UK. It argues that the positive effect of exporting on innovation usually found in the literature varies according to the specific destinations of exports, and it identifies two dimensions along which export destinations might differ: the level of foreign technological spillovers available to exporting firms (the technological learning effect) and the type of foreign demand that exporting firms are able to access (the foreign demand effect). The empirical analysis, which takes advantage of firm-level information about the export destinations of exporters, shows that while the technological learning effect increases mainly the incentives to introduce brand new product innovations, the foreign demand effect fosters the adoption of process innovations.
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