Learning by Exporting: The Effects of Exporting on Firm Innovation in Korean Manufacturing Industries

While a body of literature states that higher productivity or innovation leads firms to engage in exporting, previous empirical findings across many nations have also shown that exporting operation can precede productivity in the opposite direction and exporters perform better than non-exporters in several domains. We argue that exporters can often access diverse knowledge inputs not available in the domestic market, and this knowledge learning can spill back on the focal firm, thereby fostering increased innovation. In this paper, we examined the effects of exporting on the product, process, and organizational and marketing innovations of Korean manufacturing firms implementing probit regressions using the 2010 Korean Innovation Survey (KIS) data. We found that exporting is positively associated with innovation, especially product innovation. Moreover, the higher the level of exporting a manufacturing firm achieves, the more likely innovation activities are to be conducted in product, process, and organizational innovation areas. However, our data did not support our hypothesis regarding the relationship between export intensity and marketing innovation.