Title: Export intensity, domestic competition, and product innovation in an emerging economy

Authors: Zhenzhen Xie; Jiatao Li

Addresses: Department of Innovation, Entrepreneurship and Strategy, School of Economics and Management, Tsinghua University, Beijing, China ' Department of Management, School of Business and Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong

Abstract: Recent studies have found contradictory evidence about the relationship between a firm's exporting intensity and its success in product innovation. Data on 6,197 firms in the Chinese auto industry were analysed to demonstrate that the relationship is actually inverted-U shaped, at least in that specific context. Exporters in emerging economies can be technology and market leaders in their domestic markets, but internationally they tend to be technology and market laggards. When the export intensity is low firms that also export can benefit from knowledge gained in overseas markets, improving their product innovation. When the export intensity is very high, focused exporters tend to focus on the overseas markets where they may not have competitive advantages in product innovation, developing fewer product innovations. Furthermore, the paper found that the inverted-U shaped relationship between export intensity and product innovation is strengthened by more intense competition in the home market.

Keywords: exporting; competitive advantage; product innovation; emerging economies; China; automobiles.

DOI: 10.1504/IJTM.2017.083612

International Journal of Technology Management, 2017 Vol.74 No.1/2/3/4, pp.96 - 121

Accepted: 25 Oct 2015
Published online: 12 Apr 2017 *

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