Journal
APPLIED ECONOMICS
Volume 43, Issue 23, Pages 3007-3020Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.1080/00036840903427190
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There is a strong expectation in the literature that exporting and innovation activities (particularly R&D) are strongly related, and that the need to be innovative is increasing over time due to globalization. In this study, we find that R&D is endogenous in a model that determines which British establishments enter export markets, and when such simultaneity is taken into account the strength of the export-innovation relationship is generally quite weak (especially in the nonmanufacturing sector). Rather, we find that the size of establishments and firms, foreign ownership, the extent of international co-operation and, most importantly, the industry sector to which the establishment belongs, are the most significant in explaining which establishments are able to overcome entry barriers into overseas markets.
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