CAN FIRMS LEARN FROM EXPORTING? A NEW PERSPECTIVE.

Abstract

This article presents a study that examined product innovation and patent application counts of a stratified representative sample of Spanish manufacturing firms from 1990-1997. Empirical findings across many nations show that exporters have superior productivity compared to non-exporters and that this relationship is driven by productive firms becoming exporters. Firm level data from a growing set of countries show that exporting firms or plants have superior productivity compared to non-exporters. It is found that exporting is more than just an activity to increase the scope of a company's product market. It is an activity that can generate information that the firm can use to innovate. Therefore, exporting can be considered a strategic action through which firms can enhance their competitive position. In fact, the results on patent applications in Spain suggest that firms may use the knowledge acquired abroad to increase their competitive position at home. Firms will often need enhanced productivity in order to be competitive in the face of transportation and product adaptation costs. Should they lack this competitiveness, it is unlikely that they will be able to effectively compete in export markets and this in turn will limit the flow of knowledge. As a result, the strategy of engaging in exporting to enhance innovation will likely not be optimal for all companies.