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Innovation and the Creative Destruction of Trade: A Study of the Intensive and Extensive Margins of Trade for French Firms

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  • Robert J. R. Elliott
  • Liza Jabbour
  • Enrico Vanino

Abstract

Our study of French exporters examines the causal relationship between innovation and extensive and intensive margins of trade using a propensity score matching and difference‐in‐differences approach. Results show innovation has a positive impact on total exports driven primarily through the intensive margin. To understand the absence of an extensive margin effect, we show new and terminated product–country transactions increase at similar rates in the year of innovation for the treated and control groups but net trade creation for innovators outstrips that of non‐innovators in the following two years implying firms need to innovate in order to survive in export markets.

Suggested Citation

  • Robert J. R. Elliott & Liza Jabbour & Enrico Vanino, 2020. "Innovation and the Creative Destruction of Trade: A Study of the Intensive and Extensive Margins of Trade for French Firms," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 180-208, February.
    • Handle: RePEc:bla:obuest:v:82:y:2020:i:1:p:180-208
    DOI: 10.1111/obes.12324
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    Cited by:

    1. Lota D. Tamini & Aristide B. Valéa, 2021. "Investment in research and development and export performances of Canadian small and medium‐sized agri‐food firms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(3), pages 311-336, September.
    2. Siedschlag, Iulia & Meneto, Stefano, 2020. "Green innovations and export performance," Papers WP674, Economic and Social Research Institute (ESRI).
    3. Elliott, Robert J. R. & Kuai, Wenjing & Maddison, David & Ozgen, Ceren, 2021. "Eco-Innovation and Employment: A Task-Based Analysis," IZA Discussion Papers 14028, Institute of Labor Economics (IZA).
    4. Immaculada Martinez-Zarzoso & Ana Maria Santacreu, 2024. "Cross-border Patenting and the Margins of International Trade," Working Papers 2024-028, Federal Reserve Bank of St. Louis.

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