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Internationalization and innovation of firms: evidence and policy

Altomonte, Carlo, Aquilante, Tommaso, Békés, Gábor and Ottaviano, Gianmarco I. P. (2013) Internationalization and innovation of firms: evidence and policy. Economic Policy, 28 (76). pp. 663-700. ISSN 0266-4658

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Abstract

We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom). We find strong evidence of positive association among the three firm-level characteristics across countries and sectors. We also find that the positive correlation between internationalization and innovation survives after controlling for productivity, with some evidence of causality running from the latter to the former. Our analysis suggests that export promotion per se is unlikely to lead to sustainable internationalization because internationalization goes beyond export and because, in the medium to long term, internationalization is likely driven by innovation. We recommend coordination and integration of internationalization and innovation policies 'under one roof' at both the national and EU levels, and propose a bigger coordinating role for EU institutions.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2013 CEPR, CES, MSH
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Funders: European Commission's Seventh Framework Programme (contract number 225551), Federatie van Nederlandse Ruitersportcentra, European Firms in a Global Economy: Internal policies for external competitiveness (EFIGE)
Date Deposited: 12 Dec 2013 14:46
URL: http://eprints.lse.ac.uk/54877/

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