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# Endogenous Innovation and Export Performance in Firms

Version 1
: Received: 6 March 2023 / Approved: 7 March 2023 / Online: 7 March 2023 (01:32:45 CET)

How to cite:
Carboni, O.A.; Medda, G. Endogenous Innovation and Export Performance in Firms. Preprints 2023, 2023030115. https://doi.org/10.20944/preprints202303.0115.v1.

Carboni, O.A.; Medda, G. Endogenous Innovation and Export Performance in Firms. Preprints 2023, 2023030115. https://doi.org/10.20944/preprints202303.0115.v1.

### Cite as:

Carboni, O.A.; Medda, G. Endogenous Innovation and Export Performance in Firms. Preprints 2023, 2023030115. https://doi.org/10.20944/preprints202303.0115.v1.

This study investigated whether export performance is correlated with innovation. We explicitly considered five types of innovation: a) process innovation; b) product innovation; c) process and product innovation; d) product innovation new to the firm; and e) product innovation new to the market. We en-larged the findings of R&D-export and R&D-investment relations using a vast sample of cross-European firms. We considered innovation as endogenous and determined by R&D through a process characterized by the role of the regional technological environment. Our analysis enabled us to propose an integrated model incorporating R&D, innovation and export, in a framework of simultaneous equations which consider their mutual correlations. To the best of our knowledge, this work is the first in recent years to empirically compute the relation between R&D and tangible investment at the micro level. Econometric results showed that product and process innovation are positively linked to the export intensity of European manufacturing firms. The results also showed complementarity effects between the two kinds of innovation. The av-erage effect on export intensity from carrying out process innovation is larger than that found for product innovation, except in cases where the product is new to the market. When both types of innovation have been carried out, a larger effect results than that found for product or process innovation alone. Furthermore, the average marginal effect on export intensity from innovations of any kind among those studied here is highly positive and significant.
European firms; R&amp; D; innovation; export; IV and fractional response model

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