Policy brief: Market creation and export
A firm’s ability to compete on the international market is influenced by its capacity to introduce and market new and improved products
Abstract
Innovation directly influences exporting behaviour, because firms often innovate as a strategy to gain international market share. A firm’s ability to successfully compete on the international market is influenced by its capacity to introduce and market both new and improved products. It is for this reason that the link between innovation and exporting has received considerable attention. One strand of research investigates the complementarity between exporting and innovation while the other examines the direction of causality. Nevertheless, few studies take into account the possibility of both causalities occurring simultaneously. Furthermore, the majority of these studies have been conducted in developed countries. For instance, previous studies find evidence of learning by exporting in Sub-Saharan Africa (SSA), implying that participation in international markets facilitates knowledge flows from customers and competitors. However, it remains unclear how this mechanism affects the exporting-innovation relationship.
Citation
Tilburg University (2017) Policy brief: Market creation and export
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