Innovation and export performance: do young and mature innovative firms differ?

Abstract

The relevant literature is conflicted about the direction of causality between innovation and exports. In this paper we attempt to shed light on this relationship by setting a theoretical framework where a two-way causality is hypothesized to exist between these two firm activities. In addition, the role of firm age is highlighted as firms at different stages of their life cycle may face different prospects and constraints and thus develop different strategies to survive and grow. Such differential patterns may be even more intense due to the different knowledge and capabilities portfolio possessed by young and mature firms. Employing a sample of Greek Manufacturing R&D active firms for the year 2010, we estimate a multi-group path analysis for young and mature firms. Even though empirical results do not support the existence of a two-way causality between innovation and export performance, when we account for the moderating role of age it becomes evident that the direction of causality differs between young and mature firms. Also the indirect and direct effect of firms’ R&D stock is confirmed as an intermediate link within the innovation-export nexus.