Product Innovation、Process Innovation And Export Dynamics:Mechanism And Effect

Since joining WTO, China gained almost 10-year high-speed export expansion with advantages of cheap labor and other low-cost endowments export. However, with the disappearance of the demographic dividend and the reflux of Manufacutruing in Europe and America, China has entered the "New Normal" period:the continuing decline of the export growth, the slow speed of the export structure upgrading. It becomes more urgent to deeply research on the entering, exiting and the survival of the mechanism and effects of export dynamics microscopically. Previously literatures has made lots of research on the relationship between the exchange rate, trade liberalization and the export dynamics. However, there is a lack of study from the technological perspective to discuss the deep mechanism of the export dynamics. Based on this argument, this paper starts from the perspective of the innovation, focus on the effect of product innovation and process innovation on the exports dynamics, and further, it will articulate the relationship among different types of innovation and the export dynamics effect.In light of the facts about Chinese multiple-product enterprises, export dynamic is subdivided into enterprise-level and product-level:first, based on the single-product model, we analyze the mechanism of the different effects of both product and process innovation on export dynamic, and test the theoretical proposition empirically; and then introducing the product innovation and process innovation into the model of multi-product, uncovering the inner mechanism between the innovation and product-level export dynamics, and focusing the attention on the dynamics of the core product which reflects the enterprise’s competitive edge; last, through the learning-by-exporting perspective, we make in-depth study of the relationship between different types of innovation and the export-dynamics effect and its functioning channel, expanding the previous research.The main conclusions are as follows:1. On enterprise’s perspective, the study reveals that effect of different types of innovation on export dynamic is on both demand-side and supply:quality increasing effect by product innovation and cost reduction effect by process innovation. Indicated in chapter 3, both two type of innovation can motivate the entrance of new enterprise and at the same time, they restrain the existing ones to quit and maintaining to export. Further, on comparative basis, we find that, when the initial quality of the enterprise is low, with the same amount of R&D input, product innovation is more effective in motivating entrance, while when the enterprise has entered the export market, the quality is relatively high, and at the meanwhile, process innovation is dominant than the product innovation. In China, the product innovation is more effective in motivation entrance, while process innovation has more significant effect in restraining quit and maintaining.2. On product’s perspective, the study reveals again that effect of heterogeneous innovation on marginal export dynamic is on both demand-side and supply:"Cannibalization" effect by product innovation and "Economies of Scale" effect by process innovation. Indicated in chapter 4, effect of product innovation depends on the suck cost-led negative "Cannibalization effect" and market scale-led positive "Cannibalization effect", while process innovation has effect through increasing the production efficiency without new product produced and no "Cannibalization effect", which makes it more effective in inhibiting exit. Depending on empirical study using the micro data of Chinese enterprises with various type of products, product innovation is more effective in introducing new product to export while process innovation has a more significant role in reducing export risk. Besides, core product dynamics, reflecting the comparative advantage in export market embodied in the core product transition behavior. To a certain extent, the transition of the core product represents the ability of switching the comparative advantage. Both the theoretical and empirical results show that, innovation, especially the product innovation is the driven force to stimulate the transition of the core product.3. In terms of the research on the product innovation, process innovation and export dynamic effect, the paper argues that different types of innovations have heterogeneous "absorption capacity" which lead to heterogeneous effects on "export dynamics effect". Indicated in chapter 5, generally, innovation imposes effect on "export dynamics effect" by "absorption capacity" through three important channels:learning scope, learning intensity and accumulated time of learning. While in term of product innovation and process innovation, product innovation leading to the exploring learning ability, takes the effect through the way of learning scope while process innovation’s effect is more dependent on the way of leaning intensity and accumulated time of learning through the exploiting learning ability.