Exports, innovation and productivity: Firm-level evidence for Belgium

Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that it is the combination of product and process innovation, rather than either of the two in isolation, that increases firms’ probability to enter the export market. However, after additionally controlling for potential endogeneity of the innovation activities, we find that only firms with a sufficiently high probability to start exporting will engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation.status: publishe