This paper examines the relationship between innovation and export performance for African ﬁrms. We use Tobit simultaneous equation full information maximum likelihood (FIML) model with selection on a crosssectional dataset from the World Bank’s Enterprise Surveys for 28 African economies. The paper provides new evidence of a two-way positive relationship between innovation and export performance in African ﬁrms: innovation is important for both the ability to export (export propensity) and for export intensity, while exporting also increases the likelihood of innovating. These eﬀects are driven mainly by direct exports and apply to both product and process innovation. We argue that these results point to a two-way relationship in which innovation enables ﬁrms to ‘learn to export’, while ﬁrms also ‘learn to innovate’ through exporting. A higher share of foreign ownership in ﬁrms, as well as ﬁrms having an internationally recognised quality certiﬁcation strengthen the positive eﬀects in both directions.
‘Learning to export’ and ‘learning to innovate’: Revisiting the relationship between innovation and exports in African ﬁrms
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