| By: |
Anh Ngoc Nguyen (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam);
Ngoc Quang Pham (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam);
Chuc Dinh Nguyen (Aston Business School, Aston University, UK);
Nhat Duc Nguyen (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam) |
| Abstract: |
Innovation has long been considered an important factor for creating and
maintaining the competitiveness of nations and firms. Common knowledge stands
that innovation is the cause of the increase of exports. However,
contradicting empirical evidences are reported in the literature on the
causality between innovation and export. In this paper we examine whether
innovation performed by small and medium enterprises (SMEs) enhances their
exporting likelihood in the context of a developing country of Vietnam. Using
an uniquely rich Vietnamese SMEs database, we find that innovation as measured
directly by 'new products', 'new production process' and 'improvement of
existing products' are important determinants of exports by Vietnamese SMEs.
We add to the current literature by examining modification of existing
products as an innovation activity. We also find evidence of endogeneity of
innovation that may lead to biased estimate of innovation in previous studies,
which failed to take this problem into account. |
| Keywords: |
Innovation, Export, Vietnam, SME, Instrumental Variable, Bivariate |
| JEL: |
F02 L2 O3 |
| Date: |
2008–03 |
| URL: |
http://d.repec.org/n?u=RePEc:dpc:wpaper:0908&r=tid |