Discussion Papers

Direction of Causality in Innovation-Exporting Linkage: Evidence on Korean Manufacturing

By Chin Hee HAHN, Chang-Gyun PARK

ERIA Discussion Paper 2012-07

Posted: June 2012

Abstract


This paper examines various possible bi-directional causal relationships among exporting, innovation, and productivity utilizing plant-level data on Korean manufacturing. Based on both propensity score matching technique and three-variable panel VAR estimation, we find a significantly positive effect of exporting on new product introduction. The effect for the other direction of causality is estimated to be positive but not significant. Panel VAR estimation results suggest that plant productivity has a significantly positive effect on both exporting and new product introduction.

ERIA-DP-2012-07.pdf

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