Process and product innovations, multi-product status and export performance: firm-level evidence from V?4 countries

Abstract

Research background: In this paper, we study empirically the relationship between different forms of innovations, multi-product status and export performance of firms from four Visegrad countries. We treat innovations as the key element that can increase the level of firm productivity.

Purpose of the article: The main objective is to analyze the empirical relationship between different firms of innovation of firms from Visegrad countries and their export performance. In contrast to previous studies that use R&D spending as a measure of innovation, we rather relay on innovation outcomes. Our detailed hypotheses postulate the existence of positive relationships between firm export performance and different forms of innovation. We seek to determine which type of innovation activity is of the greatest importance for exporting and whether it depends on firm size, the level of internationalization, the use of human capital and its sector of activity. In addition, we control for the multi-product status of firms, i.e. whether they sell one or many products.

Methods: The measures of innovative activity of companies include both spending on R&D as well as its effects, such as product and process innovations. In addition, we control for the multi-product status measured by the share of the main product in total sales of the firm, as well as for other firm-level characteristics. The empirical implementation of the theoretical framework is based on the probit models, applied to the fifth edition of BEEPS firm level data set covering the period 2011?2014.

Findings & Value added: Our results indicate that the probability of exporting is positively related to both product and process innovations and the multi-product status. In addition, we find that the probability of exporting is related to the set of control variables including labor productivity, firm size, the share of university graduates in productive employment, foreign capital participation and the use of foreign licenses.

Keywords

export activity, firm heterogeneity, process and product innovations, multi-product status, Visegrad countries

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