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Internationalization and innovation of firms: evidence and policy

Altomonte, Carlo and Aquilante, Tommaso and Békés, Gábor and Ottaviano, Gianmarco I. P. (2014) Internationalization and innovation of firms: evidence and policy. CEP Special Reports, CEPSP32. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Identification Number: CEPSP32

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 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: Monograph (Other)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2014 The Authors
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
J Political Science > JA Political science (General)
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Series: Working Papers > CEP Special Papers
Date Deposited: 26 Nov 2014 14:50
Last Modified: 26 Nov 2014 14:50
URI: http://eprints.lse.ac.uk/id/eprint/60275

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