Innovation, productivity, and export: Evidence from SMEs in Lower Normandy, France

This paper presents an analysis of the crucial relationship between innovation, productivity, and export in SMEs. The primary aims of this study are 1) to evaluate the role of innovation in the premium export; and 2) to test the hypothesis of firm conscious self-selection on willing to export. To this end, our database of SMEs, obtained from the survey conducted in the IDEIS project, provides highly pertinent information on innovation and export areas. We first evaluate apparent premium of exportation and that of innovation. In addition, we demonstrate the effectiveness of the export premium for high exportation firms that implement process and organization innovations. Finally, we analyse the effect of conscious self-selection from the export process that transforms an intention to export into a setting in capacity to export in short term. Conscious selfselection on willing to export is revealed by simultaneously endogeneizing productivity and innovation output based on recursive non-linear model.