Innovation, Exports, and Productivity: Learning and Self-Selection in Chile

Both exports and innovation-in particular, research and development (R&D)-are key factors for the growth of firms and economies, but there has been little study of the combined impact of exports and innovation on growth of firms and economics, especially in developing countries. We use plant-level data from Chile to examine the relationships among productivity, R&D expenditure, and exports. We find that firms that invest in R&D are considerably more likely to export, but the reverse is not true. Even though exporting does not stimulate investment in R&D, exports and R&D have a joint effect on improving productivity. These results allow us to recover the private return of the learning by exporting effect across different sectors.