Discussion Paper

No. 2017-14 | March 27, 2017
Innovation and willingness to export: is there an effect of conscious self-selection?

Abstract

This paper presents an analysis of the crucial relationship between innovation, productivity, and export in Small and Medium Enterprises (SMEs). The primary aims of this study are to evaluate the role of innovation in the premium export and test the hypothesis of firm conscious self-selection on willingness to export. To this end, the authors used their database of SMEs, obtained from the survey conducted in the IDEIS project, which provides highly pertinent information on innovation and export areas. Based on the aforementioned database, the authors evaluate apparent premium of exportation and innovation. In addition, they demonstrate the effectiveness of the export premium for high exportation firms that implement process and organization innovations. Finally, the authors analyse the effect of conscious self-selection from the export process that transforms an intention to export into the capacity to export in short term. The conscious self-selection to export is revealed by simultaneously endogeneizing productivity and innovation output based on recursive non-linear model.

Data Set

JEL Classification:

C14, C35, D22, F12, O31

Assessment

  • Downloads: 246

Links

Cite As

Mohammad Movahedi, Kiumars Shahbazi, and Olivier Gaussens (2017). Innovation and willingness to export: is there an effect of conscious self-selection? Economics Discussion Papers, No 2017-14, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2017-14


Comments and Questions


Anonymous - Referee report 1
May 15, 2017 - 11:13

see attached file


Mohammad Movahedi, Kiumars Shahbazi, and Olivier Gaussens - Reply to referee report 1
June 19, 2017 - 12:31

see attached file


Anonymous - Referee Report 2
May 26, 2017 - 09:04

This paper implements a recursive non linear model to test for the relationship between a firm decision to innovation and a firm decision to export on an original sample of 86 SMEs located in region “Lower Normandy” in France. Although small, the dataset has a unique advantage in the sense ...[more]

... that it includes information on the willingness to export (based on self-declaration of non-exporting firms) and not simply on effective firm exports. Thanks to this information, the authors intend to test whether a firm intention to export induce a firm decision to innovate which in turn impact the firm effective entry into export through a productivity channel.

The paper is very well drafted. It provides a comprehensive and well organized review of the previous literature. It offers a clear exposition of the dataset and a clear definition of the main variables of interest. The empirical analysis looks sound to me. However, it does not fully exploit the panel dimension of the data which is a pity regarding the initial positioning of the paper. The results support the view that firms which take their decision to innovate prior to their decision to export and that the former impact the latter through a productivity channel. However, to me the paper does not provide a direct test of the conscious self-selection hypothesis.

In the conclusion, the authors derive policy implications which sound toot strong as regards the empirical analysis. Specifically, the authors claim that “picking winners” policies are called for but I didn’t see the point. Also the authors claim that innovation support policies are better than export promotion policies to favor firm exports. Once again I can’t see the justification of this claim in the empirical analysis.

Finally, the authors point a couple of possible extensions for future works. The first one is to make a better use of the panel dimension of the data which allow to distinguish between the intention to export and actual export. This is very confusing to me as the basic claim of the paper was to use this specific feature of the data. So my main concern is: why the authors didn’t fully exploit the panel dimension of their data in this paper?


Mohammad Movahedi, Kiumars Shahbazi, and Olivier Gaussens - Reply to referee report 2
June 19, 2017 - 12:32

see attached file