The Innovativity of Global Firms : Evidence from French Manufacturers

This paper investigates to which extent exporters, importers and multinational firms have a greater propensity to start innovation activities. To do so, we merge two different French Community Innovation Surveys (CIS) and use the model of Crépon et al. (1988), which allows us to estimate the impact of internationalization on the decision of investing in R&D, the intensity of R&D (ration R&D expenses/sales) and knowledge output. The model is applied to a sample of first-time innovators, which are compared to a sample of firms that do not engage innovation activities. The first result is that global firms are more likely to start investing in R&D : indeed, they have to face tougher competition and this seems to be an additional incentive to invest in R&D. However, R&D intensity is not affected by international activities and seems to decrease with size, which could mean that the first investment in R&D is always a cautious one, which takes the form of a fixed cost. Finally, international activities are found to increase the capacity of innovating, regardless of size, industry, and R&D intensity. In particular, outward FDI seems to be an asset for developing new products for the market. This could be due to the access to new information sources and/or a more efficient use of the sources.