Open Innovation, Productivity, and Export: Evidence from Japanese firms

Author Name ITO Banri (Fellow, RIETI) / TANAKA Ayumu (Fellow, RIETI)
Creation Date/NO. February 2013 13-E-006
Research Project Study of the Creation of the Japanese Economy and Trade and Direct Investment
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This paper empirically examines the relation between a firm's productivity and its joint decision of research and development (R&D) strategy and exporting, based on Japanese firm-level data and the simple theoretical framework that extends the firm heterogeneity model so that both internal and external (outsourcing or technology purchase) R&D strategies are taken into account. The empirical results from nonparametric and semiparametric methods show that exporting firms engaged in R&D activities are more productive than non-exporters and exporters with no R&D, regardless of whether internal or external R&D strategy is adopted, and that exporters which employ both R&D strategies are the most productive. The results suggest that an open innovation strategy is complementary to an in-house R&D strategy and is crucial for further promoting innovation for internationalized firms.

Published: Ito, Banri, and Ayumu Tanaka, 2016. "External R&D, productivity, and export: Evidence from Japanese firms," Review of World Economics, Vol. 152(3), pp. 577-596