Which innovation strategy do internationalised firms follow?: evidence from Spain

Abstract

This paper compares the innovation strategy of internationalised firms, foreign-owned subsidiaries and domestic exporters, relative to firms that serve the domestic market only. The analysis is performed on a sample of manufacturing Spanish firms over the period 2006-2011. We not only focus on different forms of innovation, distinguishing between imitation and pioneer innovation, but also on the heterogeneity of exporters and foreign-owned firms. We find that foreign-owned firms and domestic exporters (excluding those serving only the EU market) are more likely to introduce market novelties ahead of competitors in low-tech sectors and, to a lesser extent, imitate more than local firms. However, domestic exporters and foreign-owned firms in Spain are not more innovative (neither in terms of original nor imitative products) than local firms in high-tech sectors.