Export and innovation in Cambodian clothing manufacturing firms

This paper uses embodied measures of innovation with a focus on changes in machinery andequipment, material inputs and plant layouts and products to analyse the incidence ofparticipation and the relationship between exports and innovation intensity in Cambodianclothing firms. Contrary to claims that foreign cut, make and pack clothing operations areunlikely to stimulate innovation, this paper tests the industrial policy exponents’ argumentthat there is a positive relationship between exports and innovation (division of labour). Theresults show that Cambodian clothing firms show a strong participation in innovation; inaddition, the relationship between exports and innovation intensity is strong and positive. The positive relationship between exports, innovation and employment suggests that effortsshould be initiated by poor populous economies to stimulate technological upgrading evenin the lowest value-added segments of production.