Moderating Effect of Innovation Strategy on Learning-by-Exporting: A Cross-Country Study

This paper empirically examines the learning-by-exporting theory from a new angle: how firms innovate. Two different innovation strategies are studied. One is independent innovation if a firm conducts in-house research and development activities on its own and the other is spillover innovation if a firm adopts external technologies and knowledge from the others. Global firm-level data were acquired from the latest 2017–19 Business Environment and Enterprise Performance Survey. The learning-by-exporting effect is interpreted as a positive effect of firms’ exports on their productivity, which is estimated semi-parametrically. After implementing a three-step estimation method that addresses endogeneity, the learning-by-exporting effect was found to be importantly subject to firms’ innovation strategies. Learning-by-exporting can only be significantly and robustly detected among firms with spillover innovation, whereas exports cannot always enhance independent innovators’ performance. Further heterogeneity tests support this finding. This paper suggests that the learning-by-exporting effect is essentially a technology spillover process, and it highlights the importance of both independent and spillover innovation that must be implemented and regulated properly.