Are Export Premia Robust to Innovation Statistics?

Description

This paper analyses in what extent innovation contributes to the productivity premium of exporters. We start by performing non parametric tests on TFP distributions on different groups of firms characterized by their export and innovation behavior. We show that the TFP distributions of exporters and innovators stochastically dominate those of non exporters and of non innovators, respectively. We pursue with OLS regressions and show that the export premium, defined as the productivity advantage of exporters over non-exporters, is robust to the introduction of innovation statistics. We conclude that export and innovation each have specific mechanisms in their relationship with productivity. The contribution of innovation abilities remains however small: once controlled for the firm size, its ownership, and its innovation abilities, the residual export premium is still around 3%. Two additional results are found. First, both process and product innovations are associated with higher productivity when process innovation is strictly defined. Second, when accounting for distance to export markets, the export premium remains significant for global exporters only, whereas that of intra-Europe exporters vanishes. From these findings, we conclude that, beyond innovative abilities and mere size advantage, specific export-related competencies, such as specific managerial competencies or specific human capital, takes an important part in the success of Global exporters.

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