The effect of innovation on the financial performance and export intensity of firms in emerging countries

Abstract

This study aims to analyse the effects of innovation when measured by patents on the financial performance and export intensity of firms in emerging countries. An analysis of five years' data from a multinational survey is conducted with 140 predominantly manufacturing firms from Brazil, Russia, India, and China. Our results indicate that firms from emerging countries can take benefits from innovation by leading to higher financial performance and expanding to international markets. We also found that firm size, firm age, and the educational level of employees have positive relationships with financial performance. Additionally, foreign shareholders and the educational level of employees have strong associations with export performance. Thus, these results build upon previous studies for showing innovation as an antecedent of competitiveness for emerging countries' firms.