This dissertation studies the interrelation between firrns' technological innovation and export strategies and the consequences of these strategies for firm performance. High technological performance is increasingly related to successful commercial and economic performance. At the same time, a strong export base is generally viewed as a key component for economic growth. Exporting and innovation are both important drivers of firm performance and, moreover, are very likely to be interdependent. The advantages created by successful innovation should transíate into export performance for internationalizing firms. Also, with increasing international competí tiveness, exporting firms face tougher competition and innovation becomes important to reduce competitive pressure. This dissertation aims to disentangle this complex relationship between exports and innovation. It consists of three closely related essays. The first studies the effect of exports on firms' innovation performance (learning-by-exporting). To what extent do exports foster innovation activity? And, if exports do affect innovation positively, which firms benefit from it most? The second essay analyzes the interrelation between innovation and the productivity-exports link. One of the basic empirical facts regarding productivity is a strong positive association between productivity and exporting activity at the firm level. This is explained by selection of more productive firms into exports. We argüe that the selection of more productive firms into exporting could be explained by innovation. successful innovation enhances productivity, leading to the selection of productive firms into export markets. The third essay examines whether innovation and export strategies are complementary in their effect on SMEs' organizational growth. The hypothesis is that innovation and exporting positively reinforce eacfi other in a dynamic virtuous cycle. Henee, SMEs that both innóvate and export outperform those that invest in only one of these strategies. The drivers of complementan'ty between exports and innovation are also investigated.
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