DO EXPORT MARKETS SELECT THE MOST INNOVATIVE PRODUCERS? THE MODERATING ROLE OF PRODUCTIVITY

In this paper, we examine a sample of 2000 Spanish industrial firms over the period 2001–2010 to analyse whether the self-selection hypothesis explains the relationship between innovation and the export activity of the company. In addition, we analyse how productivity moderates that relationship. The results indicate that the hypothesis does explain the effect of product and process innovations: Overseas foreign markets select those companies that have previously secured product or process innovations, while investment in research and development (R&D) does not increase the propensity for companies to export. On the other hand, the productivity of the company intensifies this effect. These results are robust in the face of fixed effects, different specifications of export activity and endogeneity, the last of which suggests possible effects of learning by exporting.