The Impact Of Firm’s Innovation Heterogeneity On Export Dynamics

Firm innovation is an important micro base for China’s high-quality export development.But Traditional Trade Theory and New Trade Growth Theory mainly focus on the relation between technology innovation and international trade at country or industry level.And while trade theory based on firm-heterogeneity allows study into firm-level,it fails to explain the role of firm heterogeneities.Firms’ heterogeneity in efficiency,product quality and product types result from firms’ different ability in innovation,i.e.,process,quality and type innovation.Heterogenous innovations incurs heterogenous firm export behaviors and thus different trade benefit.In practice,the trade margin of Chinese export firms increased dramatically during last 20 years,hightech products account for the majority of China’s total export.However,compared with U.S.firms,there is still long way to go for Chinese firms to export innovative products and climb up along global value chain.Thus,this dissertation attempts to build a firm-heterogenous model based on firm’s heterogeneous innovation.Besides,this dissertation calculates and analyses Chinese manufacturing firm’s performance in process,quality and type innovation,together with their heterogenous behavior in export choice,export survial time and export growth,this dissertation further investigates the impact of heterogenous innovation on firm export,the main conclusions are as per below:(1)the model finds that: process,quality and type innovation all stimulate firms’ export growth,increase the likelihood of firms’ export survival;quality and type innovation’s export-enhancing effect is larger for more efficient firms,while process innovation can’t;for multi-product firms,heterogenous innovation could increase firms intensive margin,but different types of innovation’s effects on extensive margin are quite different;R&D subsidies could stimulate firms’ innovation activities and thus promote export growth.(2)This dissertation also gives the stylized facts of Chinese manufacturing firms’ heterogenous innovation as below: labor-intensive and capital-intensive firms are more active in process innovation than technology-intensive firms;the proportion of firm carrying out process innovation is higher for exporters compared with non-exports;foreign-owned firms and firms focusing on processing trade are more active in quality innovation than local firms and firms focusing on non-processsing trade firms;before 2008,local firms are more active in type innovation,while it is the opposite after.(3)Chinese manufacturing firms’ export behavior lack stability or continuity,only a small part of all firms continued export during sample period,especially capital and technology-intensive firms and private-owned firms;after mlogit and cloglog test,the dissertation finds that process,quality and type innovation could increase firms’ export continuity,reduce the phenomenom of frequent enter,exit or pause,also the likelihood of export failure;particurly,quality and type innovation could significantly reduce state-owned and private-owned firms’ export fluctuation,help them avoid export failures.(4)Intensive margin accounts for the majority of Chinese manufacturing firms’ export growth,i.e.firms export in “old products to old markets”.Empiricial evidence finds that: process,quality and type innovation could help increase firms’ export sales,especially quality and type innovation;after decomposing a firm’s export into intensive and extensive margins at “product-market” levels,heterogenous innovation will promotes firms to adjust product and market combination at with-firm levels,significantly increase firms intensive and extensive margins.(5)Overall,R&D subsidies could stimulates firm innovation and exports.Quality and type innovation are the main channel through which subsidies works.Besides,quality innovation plays a more important role in high-tech export firms and processing trade firms,while type innovation plays a more important role in medium-tech export firms and non-processing trade firms.The possible contribution of this dissertation maybe: first,by introducing the definition of heterogenous innovation including process,quality and type innovation,it links firms’ heterogeneity in effeiency,quality and type with firm’s innovation,thus to build a logic of “firms’ heterogeneity in innovation-firms’ heterogeneity in effeiency,quality and type-export dynamics”,thus to improve peope’s knowledge of innovation and firm export;second,it build a trade model based on firm heterogeneity including process,quality and type innovation at the same time,which provides a simple framework to investigate the impact of innovation heterogeneity on firm export dynamics;third,based on large datasets at firm-level,the dissertation calculates and analyzes the innovation behavior of Chinese manufacturing firms,and by using different empirical approaches,the dissertation provides reliable evidence on the relations between innovation heterogeneity and export dynamics under China scenes.