Exports and innovation: the role of heterogeneity in exports

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This paper examines whether and how heterogeneity in exports affects firms’ innovations in China. Using comprehensive transaction-level trade data from China Customs to construct various dimensional measures exports, empirical results obtained from a matched firm-transaction panel data find that exports overall have a positive impact on promoting innovations in terms of R&D and new product sales. The innovation-enhancing effect of exports depends on the heterogeneity in exports. Firms with greater varieties of exports, more market diversification, and higher export quality are associated with a higher R&D propensity and more new product sales, while process exports are found a negative association with innovations.

Original languageEnglish
Pages (from-to)1065-1087
Number of pages23
JournalEmpirical Economics
Issue number3
StatePublished - 1 Nov 2018


  • Export heterogeneity
  • Innovation
  • Process exports
  • R&D


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