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Does Export Trade Promote Firm Innovation?

Author

Listed:
  • Yueling Cai

    (International Business School, University of International Business and Economics)

  • Gongliang Wu

    (China Economics and Management Academy, Central University of Finance and Economics)

  • Dingsheng Zhang

    (China Economics and Management Academy, Central University of Finance and Economics)

Abstract

With globalization, exports as a leading means for firms to operate internationally can not only help firms expand their market and gain economies of scale, but also provide opportunity to gain international experience and technological know-how. Using data of Chinese industrial firms and customs data from 2001 to 2007, this study empirically tests the impact of export trade on innovation. The results show that firms' participation in exports can significantly increase the likelihood of product innovation. Moreover, this study further verifies the impact mechanism and finds that the magnitude of the export learning effect is less than that of the market size effect. This study provides new ideas for China's trade transformation and upgrading, and has policy significance for guiding international operations of firms, maintaining a free international trading system, and stimulating firm exports.

Suggested Citation

  • Yueling Cai & Gongliang Wu & Dingsheng Zhang, 2020. "Does Export Trade Promote Firm Innovation?," Annals of Economics and Finance, Society for AEF, vol. 21(2), pages 483-506, November.
    • Handle: RePEc:cuf:journl:y:2020:v:21:i:2:caiwuzhang
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    References listed on IDEAS

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    More about this item

    Keywords

    Firm export; Export learning effect; Market scale effect; Firm innovation;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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