Effects between innovation, export and productivity: An analysis of peruvian manufacturing firms

Abstract

The aim of this work is to examine the relationship between innovative efforts, the level of exports and productivity in Peruvian manufacturing firms. Using data from the National Manufacturing Industry Innovation Survey (ENIIM), I estimate Tobit and quintile estimates to conclude that the initial productivity of the Peruvian firms is a determinant of the level exports (self-selection), which in turn encourages spending on innovation (exports as the determinant of innovation) to compete in the international market. Subsequently, the firm's innovation leads to a greater supply of exportable products (innovation as determining exports) and an increase in productivity (learning by exporting). Thus, it is found that the direct and indirect effects of technological innovation are reflected in increments of 23 %-44 % and 16 %-45 % according to labor productivity quintile and TFP, respectively.